South Africa’s Neotel R4.4billion deal to boost local telecom services


neotel_ceo.jpgNEOTEL, South Africa’s new telecommunications player, says its R4.4 billion finance deal with several companies will change the shape of telecommunication services in the country.

Neotel chief executive officer and managing director Ajay Pandey made the remarks after the company signed the deal with Nedbank Limited, Investec Bank Limited, the Development Bank of Southern Africa, the Industrial Development Corporation and the Infrastructure Finance Corporation Limited on Wednesday.

This brings the funds raised in the deal to R7,5 billion.

“On the 12th of December 2006 we signed a bridging finance facility to the value of R2 billion to get the process of building our network started. At that point already we made history as it was the largest non-recourse facility for a start-up telecommunications project in the region, and one of the largest in South Africa then.

“Neotel has been aggressively rolling out the new generation converged network across the country to provide services to its enterprise clients. In addition we launched our consumer services during the course of 2008 and finally the South African consumer not only has a choice, but they are seeing real value.

“We continue to grow our network aggressively to ensure that customers have access to the value adds that we bring to the telecommunications market,” said Pandey.

Mike Peo, head of Infrastructure Project Finance at Nedbank Capital, said: “This is undoubtedly one of the most significant project financings of the year and the ability to pull off a financing of R4.4 billion under current financial market conditions is testimony to both the belief in the offering, which will change the shape of telecommunication services in South Africa, and in the strength of the shareholder grouping, led by Tata Communications Limited of India.

“Nedbank is very proud to have played a pivotal role in shaping the transaction and is committed to partnering Neotel as it grows from strength to strength,” he said.

Robert Gecelter of Investec Project & Infrastructure Finance said they were proud to be associated with Neotel.