Global Telecom Holding is set to pay $320m of annual interest on the bonds issued in April 2016 worth $1.2bn. The proceeds of the offering were used to pay for the VimpelCom shareholders.
Global Telecom Holding S.A.E. had announced that its wholly-owned Dutch subsidiary, GTH Finance B.V., has priced $500m 6.25%-Senior Notes due in 2020 and $700m 7.25%-Senior Notes due in 2023, guaranteed by VimpelCom Holdings B.V. The investor relations manager at Global Telecom Holding, Ola Tayel, said that the company is now repaying the two tranches.
Tayel explained that the company has completed repayment of the VimpelCom loan during the second quarter of 2016 through issuing these bonds, which reduced loan interest to 9.25% instead of 12.5%—which is the debt service costs that the company was suffering from.
She noted that the company confined the interest to 6.25% and 7.25% with a total yield of $82m repaid over 7 years.
The company had also signed with Citibank and ING Bank a short-term contract worth $200m without collateral to finance the purchase of treasury shares last month. The loan will be repaid before 15 December 2017 with an interest of 4%.
The company’s general assembly approved on 19 March the execution of 524.57 million treasury shares. VimpelCom did not buy back those shares; thus increasing its contribution in the company’s capital from 51.9% to 57.77%.
Meanwhile, Tayel said that the company completed the activation of the 3G network in Algeria, Pakistan, and Bangladesh; despite the challenges it faced in Algeria.
She added that the company has introduced the 4G service in 20 Algerian states at the end of 2015, with a plan to reach 29 states before the end of the current fiscal year.
She noted that the company hopes to achieve a strong performance in Pakistan after the merger of two telecommunication giants—Mobilink and Warid—while she expected pressure to face its subsidiary in Algeria, Djezzy.
Tayel said that the number of the company’s clients in Pakistan increased by 62%.
The company’s revenues in Pakistan also increased by 27% in 2016, reaching $1.27bn. Revenues from the unit in Bangladesh also rose by 3% to record $620.7m. Yet, in Algeria, revenues fell 18% to $1.04bn.
Tayel noted that mobile data revenues increased by 75% to record $291m in 2016, due to the strategic plan to focus on transitioning from traditional voice messaging and text to digital services.
In a different context, Tayel said that the company aims to sell mobile towers in Pakistan in the coming period.
The research department at Pharos Holding expected the revenue of selling those towers to reach up to $1bn.
Tayel noted that the company completed the repayment of $70m to Atheer Telecom Iraq on 15 March, according to the ruling of the British High Court.
Despite the payment of the amount of compensation, the value of cash and cash equivalents at the company rose 20% compared to the previous year, to record $606.4m by the end of 2016, compared to $508.1m by the end of 2015.
Pharos Holding had previously stated that per share of the provision of compensation for this case ranges between 20-30 piasters.
The English High Court ruled that Global Telecom has to pay a compensation to Atheer Telecom Iraq worth $60m, in addition to $7.75m in interest due, and $1.25m as a temporary down payment for legal costs.
Global Telecom is set to hold its general assembly on 29 March to consider transferring $182.7m from its legal reserve to cover losses of the independent company.
Financial results of the company showed it suffered losses in 2016 worth $91.9m, down from profits of $2.374m in 2015.
Meanwhile, consolidated profit jumped 1,880% over the last year, posting a net profit of $193.9m, compared to $9.8m in 2015.