Bank of China, CDB, and China Merchants Bank provide $591 million syndicated loan facility to CamGSM Co. Ltd.

On November 4, 2010, Bank of China, China Development Bank, and China Merchants Bank signed a $591 million syndicated loan agreement with CamGSM Co. Ltd., a subsidiary of Royal Group of Companies (Cambodia’s largest private conglomerate) and owner of the MobiTel and Cellcard mobile brands. The loan carried a 7-year maturity and an unknown interest rate. The syndicated loan was divided into two tranches with $421 million of the loan proceeds being used by the borrower for the refinancing of a bridge loan from Standard Bank and ANZ ($346 million) as well as an earlier loan arranged by International Finance Corp in 2008 ($75 million). The refinancing deal will enable The Royal Group to refinance a $421 million loan used to buy out the 100 percent majority stake (purchase included 61.5% of shares) in Mobitel from Luxembourg-based Millicom International Cellular S.A. (“Millicom”) on November 26, 2009. The remaining $170.1 million of the loan proceeds being used by the borrower for capital expenditures and business activities (through a working capital facility). Part of the working capital facility proceeds were reportedly used to fund a 5-year $500 million services and equipment contract with Huawei. In January 2011, Royal Group of Companies Chief Financial Officer Mark Hanna confirmed that the 18-month bridge loan from Standard Bank and ANZ had been repaid in full, four months earlier than was required.

Additional details

1. The project title is also known as the Huawei-Cambodia CamGSM Export Buyer’s Credit and Commercial Loan Project. 2. In March 2011, "Trade Finance", an authoritative magazine in the field of international trade finance, announced that China Merchants Bank, Bank of China and China Development Bank as the joint lead bank arranged the Huawei-Cambodia CamGSM Export Buyer’s Credit and Commercial Loan Project, which was awarded the "2010 "Deals of the Year" (See: 招商银行荣誉榜---2011年). The award enjoys a high reputation in the field of international export credit and trade finance. 3. Some sources seem to only attribute the second, $170.1 million tranche to the three Chinese banks involved in this syndicated loan; however, it is understood that the $421 million was also provided by them -- just immediately used instead of as a working capital line of credit (See: FINANCE FOR CLIMATE ACTION IN ASIA AND THE PACIFIC: A Regional Action Agenda to Access Debt Capital Markets and IJGlobal - RGC CamGSM Corp Finance - Cambodia.pdf).

Number of official sources

10

Number of total sources

29