Up and coming telecoms operator Smart Telecom this morning said it has completed the drawdown of a finance package worth €56.7m to fund the initial payments for the 3G and 900MHz spectrum licences recently awarded by the Commission for Communications Regulation.
In a statement to the Irish Stock Exchange this morning the company said the finance package strengthens its negotiating position and discussions are ongoing with a number of parties to facilitate a “timely and financially attractive rollout of the company’s proposed 3G network”.
The financing package comprises a convertible loan advance in the amount €28.35m from Quinn Funding, an associate company of Quinn, and a bank/borrowing facility in the amount of €28.35m, provided with the support and personal guarantee of a major shareholder, Brendan Murtagh.
Under the terms of the Quinn Financing element of the deal, Quinn has received a two-year 12.5pc redeemable convertible loan of €28.35m, secured against the assets of Smart Mobile and by a charge over the Smart’s shares in its 3G mobile subsidiary and backed by a guarantee from Smart.
The Quinn Financing is convertible at the option of Quinn into ordinary shares of €0.05 in Smart at a price of 23p, which once exercised will give rise to the issue of 83,667,875 ordinary shares, equal to 18pc of the enlarged equity.
The bank/borrowing facility is a six-month facility advanced to Smart Mobile. It is secured against the assets of Smart Mobile and by a charge over the Smart’s shares in its 3G mobile subsidiary. It is backed by a guarantee from Smart. This facility is also backed by a guarantee and indemnity from Murtagh, a significant shareholder in Smart.
This morning Smart said its plans in relation to the rollout of its fixed-line broadband strategy are progressing well. It said its legal case against Eircom relating to local-loop unbundling is progressing, according to plan, as is the rollout to exchanges and recruitment and training of residential sales personnel.
“This financing marks a significant step in our 3G mobile plans and complements Smart’s strategy in providing high-speed broadband to the Irish market,” said Smart CEO Oisín Fanning. “These initiatives will establish Smart as the most advanced provider of next-generation, converged broadband/mobile communications services in the Irish market.”
By John Kennedy