Foreign banks chip in for tower firm’s loan

Telecoms tower company Pan Asia Majestic Eagle has completed what it claims is the first cross-border, non-recourse financing arrangement in Myanmar.

The US$85 million loan will finance its tower build, with financing provided by DBS, ING, OCBC, Standard Chartered and Sumitomo Mitsui, according to a press release.

OCBC and Sumitomo Mitsui both won licences to open bank branches in Myanmar on October 1, while DBS and Standard Chartered had participated in the process earlier on, though ultimately did not receive licences.

A Yangon-based Central Bank of Myanmar official told The Myanmar Times that comes against foreign investment normally pledges collateral in the home country. Pan Asia said its loan has a non-recourse element, though, meaning it is only secured by collateral inside of Myanmar.

However, most large-scale lending to the country is likely to remain as cross-border arrangements for the time being, as onshore financing in Myanmar is still a tough sell.

Pan Asia is an independent tower company, and is currently focused on putting up 1250 towers for Ooredoo. A joint venture between Digicel and Yoma Strategic Holdings is also putting up towers for the telco.

Both Ooredoo and Telenor have pursued a strategy of contracting out their tower builds to independent companies, leasing space off the completed towers for their telecommunications equipment. The arrangement could help encourage tower-sharing between different providers in the future.

Many mobile service providers in other countries have built the towers themselves.

U Than Htun Aung, director of Myanmar’s Posts and Telecommunications Department – the telecom industry’s regulator – said in the release that he welcomed the financing as it supports efforts to build a modern communications network in the country.


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