MAGTICOM LTD (FMO-47917)

Countries
  • Georgia
Where the impacts of the investment may be experienced.
Financial Institutions
  • Netherlands Development Finance Company (FMO)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jul 15, 2016
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Magticom (MGT)
The holder of the loan, grant, or other investment.
Sectors
  • Infrastructure
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 25.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Loan Amount (USD)
$ 25.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ FMO website

Updated in EWS Jun 26, 2018


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Project Description

According to FMO website, MGT is the leading telecom operator in Georgia which provides mobile, broadband, fixed-line and satellite-TV services. Proceeds of the loan will be used to acquire the corporate and retail fiber broadband assets of Caucasus Online which will facilitate Magticom to expand the internet coverage initially into 9 regions in Georgia.

The transaction will provide increased access to high quality internet and IPTV services initially in 9 regions of western Georgia (due to limitations in infrastructure) where the internet penetration ranges between 21-39 percent (with the exception of Kutaisi region, penetration of 60 percent). Magticom is one of the Georgian blue chip companies (turnover: USD 120 mln, EBITDA margin: 50 percent) with further expansion plans in the country. The company is known for its technology-driven and high quality services which resulted in the market leadership for many years. Contrary to other telecom companies in FMO portfolio, MGT owns both the telecom towers and the full operations, which offer substantial business opportunities in the future. Furthermore, the proposed transaction fits with IMS strategy due to investment in telecom sector of an LMIC country, substantial development impact through increased access to internet services, additionality through long-term financing in Georgia, and partnership with EBRD.

Investment Description
  • Netherlands Development Finance Company (FMO)
Contact Information

No contact information provided at the time of disclosure.

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW) . A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism