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Overview

China Construction Bank provides $18.8 million buyer’s credit loan to Sotelco for refinancing purposes

Commitments (Constant USD, 2023)$26,081,574
Commitment Year•2009Country of Activity•CambodiaDirect Recipient Country of Incorporation•CambodiaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 28, 2009
Start (actual)
Dec 21, 2009
End (actual)
Apr 19, 2013
First repayment (originally scheduled)
Sep 28, 2011
Last repayment (originally scheduled)
Jun 26, 2016

Geospatial footprint

Map overview

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The project was to provides $18.8 million buyer’s credit loan to Sotelco Ltd., whose headquarters are in Phnom Penh, Cambodia, for refinancing purposes. More detailed locational information can be found at: https://www.openstreetmap.org/node/6776252197#map=19/11.57048/104.92372

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • China Construction Bank Corporation (CCB)

Receiving agencies

Private Sector

  • Sotelco Ltd.

Implementing agencies

Private Sector

  • Sotelco Ltd.

Insurance providers

Private Sector

  • OJSC VimpelCom

State-owned companies

  • China Export & Credit Insurance Corporation (Sinosure)

Loan desecription

China Construction Bank provides $18.8 million buyer’s credit loan to Sotelco for refinancing purposes

Grace period•2 yearsGrant element•24.0389%Interest rate (t₀)•2.73875%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•6.75 years

Narrative

Full Description

Project narrative

On September 28, 2009, Sotelco Ltd. — a local subsidiary of VimpelCom Group in Cambodia — signed an $18.8 million buyer’s credit loan agreement with China Construction Bank in the amount of $18.8 million. The loan carried an interest rate of 6-month LIBOR plus a 2.1% margin, a 2-year grace period, and 6.75-year maturity (final maturity date: June 2016). The loan’s principal amount was to be repaid in 10 equal semi-annual payments beginning in December 2011. It was backed by a Sinosure credit insurance policy and corporate repayment guarantee from OJSC VimpelCom. The loan agreement became effective on October 26, 2009. The proceeds of the loan were to be used by the borrower to refinance short-term vendor financing provided by Huawei Technologies Co., Ltd. to Sotelco and guaranteed by OJSC VimpelCom for purchases of telecommunications equipment in 2008 and 2009. On December 21, 2009, Sotelco Ltd. made a drawdown of the full amount under this loan. On April 19, 2013, OJSC VimpelCom (the loan’s guarantor) repaid the loan in full.

Staff comments

1. Sotelco LTD was the local Cambodian subsidiary of the VimpelCom Group. In July 2008, VimpelCom announced that it had acquired a 90% stake in Sotelco Ltd., which holds a GSM 900/1800 license and related frequencies for the territory of Cambodia. The transaction was consummated through the purchase of 90% of Sotelco’s parent company, Atlas Trade Limited, for $28 million. The remaining 10% of Atlas will stay with a local partner, a Cambodian entrepreneur. VimpelCom also acquired a call option to purchase the 10% interest of the local partner for market value at the date of exercise of the option. 2. AidData has estimated the all-in interest rate by adding 2.1% to average 6-month LIBOR (0.677%) in September 2009.