IFC commits US$ 100m to Dialog Telekom
Speaking at the financing to Dialog Telekom to expand its telecom
network and build a new telecommunication infrastructure network with a
US$100 million package he said the current penetration is around 32 per
cent. "This will reach the 40 per cent mark by the end of the year.
He also said that the active participation of the four-telecom
operators has also helped to achieve this growth.
He said that by the end of 2008 there would be 100 percent population
coverage. "This currently is around 90 per cent," he said.
He said that Dialog introduced SMS roaming to the region. "One reason
for Sri Lanka to be ahead of technology in the region is that regulators
have granted permission faster that other countries. It has taken over
four years for some countries in the region to grant approval for SMS
roaming," he said.
Wijayasuriya said that they were delighted that IFC has reinforced
its commitment to Dialog's growth story. Building on the relationship
seeded in 2004 through a long term financing arrangement. We are
strongly encouraged that IFC has increased its participation in Dialog
in the form of equity and expanded debt financing.
We are also appreciative of the high degree of market sensitivity
displayed by IFC in structuring a tailor made financing package to meet
the company's needs and opportunities".
The 100 million package for five years includes a US$ 70 million term
loan facility and a US$ 30 million equity commitment via the acquisition
of a 1.6 per cent holding in Dialog from Telekom Malaysia (TM).
The loan facility will enable Dialog to improve public access to
affordable and reliable telecommunication services by increasing
capacity and extending coverage, particularly in rural and under served
areas. The US$ 30 million equity commitment will also facilitate a
potential improvement of liquidity for DIAL shares in the market.
The funding will be deployed towards partially financing Dialog
Group's "quadruple play strategy". A significant portion of the proceeds
via the debt financing will be channeled towards augmenting coverage and
capacity in the mobile network in order to consolidate and grow market
leadership and product leadership in the segment.
Investments will also be made in the Fixed Line, Broadband and
Digital Television media businesses.
Minister of Investment Promotion and Enterprise Development Dr.
Sarath Amunugama ma said telecommunication is one of the fastest growing
industries in the country and it is also powering the service sector.
"The government held the monopoly of this sector before and with the
liberalistion of the industry telecommunications have broken new
ground," he said. IFC's Head of Investments for Sri Lanka and Maldives,
Jeetendra Marcelline, added, "IFC sees Dialog as a key partner in Sri
Lanka. The teams worked closely on the new package, which helps address
a multitude of Dialog's needs."
He said that this is their single largest investment in Sri Lanka.