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

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.

Additional details

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.

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