Mergers, Acquisitions and Financial Results

IFC, the private sector arm of the World Bank Group, last week announced that it will provide financing to five subsidiaries of Celtel International B.V. to help expand and upgrade the company's fast-growing mobile networks in the Democratic Republic of Congo, Madagascar, Malawi, Sierra Leone, and Uganda.

The $320 million investment package, IFC's largest financing to date in Sub-Saharan Africa, will result in better quality mobile access in countries with extremely limited telephone services, creating new opportunities for businesses and consumers across the economic spectrum.

IFC will provide a $160 million loan for its own account, and an additional $160 million in syndicated loans with participating commercial banks and parallel loans from bilateral financial institutions. The transaction also marks the first-ever mobilization of IFC syndicated loans in Madagascar, Malawi, and Sierra Leone, helping bring long-term commercial financing to markets at the frontier of private sector development. The syndication includes three South African banks that are participating in IFC's syndications program for the first time.

Celtel, which was acquired by MTC of Kuwait in 2005, will use the funds to modernize and develop the mobile networks in countries with obsolete and inadequate fixed-line networks and low telephone penetration rates, ranging from just over four phones for every 100 people in Malawi and Madagascar to about 10 per 100 people in Sierra Leone.

"Investment in infrastructure such as telecommunications is crucial for Africa's economic development, and our long-term collaboration with IFC shows that the private sector can play an important role in fulfilling that need," said Mo Ibrahim, Celtel's Chairman.