EIB Guarantee Facility for TPSA

complete

In 1994 and 1996, Telekomunikacja Polska S.A (TPSA) entered into loan agreements with the European Investment Bank (EIB) totalling EUR 250 million. TPSA had to secure a commercial guarantee for the loan amounts as condition precedent for drawdown. The EBRD committed EUR 30 million as part of a group of guarantor banks in a guarantee facility, lead-arranged by Sumitomo, to enable TPSA to make the first drawdown. The EBRD aimed to bring about the successful syndication of the guarantee facility, thereby fulfilling the main condition for TPSA to be able to make the first drawdown under the EIB finance contracts. Proceeds from the EIB finance contracts will be used to retroactively finance capital expenditures already incurred and approved by the EIB, as well as to fund the company’s 1999-2000 capital expenditure programme. The project will: TPSA is the dominant provider of telecommunications services in Poland, offering a wide range of services. TPSA competes with one local telephone operator in each of the local districts. Starting in 2000, TPSA will compete with two to three domestic long-distance operators. TPSA has monopoly over international connections until the end of 2003. The company owns 66 per cent of PTK-Centertel, a GSM-900, DCS-1800 and NMT-450 cellular operator in Poland. In November 1998, the state floated 15 per cent of TPSA stock in an initial public offering (IPO) on the Warsaw Stock Exchange, London Stock Exchange and Portal system in the United States. The EBRD participated in the IPO as a cornerstone investor. It holds 1.21 per cent in the company. An additional 15 per cent has been distributed to employees at no charge. The Polish Government intends to sell 25 per cent to 35 per cent in TPSA to a strategic investor by year-end. EBRD finance consists of a commitment of EUR 30 million in respect of a five-year EUR 250 million EIB guarantee facility, which has been syndicated by Sumitomo. This facility will guarantee the payment of all sums payable by TPSA under the terms of two finance contracts entered into on 8 December 1994 and 16 December 1996 between the EIB as a lender and TPSA as a borrower. EUR 250 million as part of an extensive network roll-out plan. The project was screened as C/0, indicating that no environmental issues were associated with this operation. A corporate environmental review of TPSA was carried out based on the EBRD’s corporate environmental, health and safety questionnaire for the IPO investment approved by the Board of Directors in November 1998. None.