MAGTICOM LTD.
Status: Completed investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
MagtiCom is a leading telecoms operator in Georgia and the only triple play operator providing a range of services including mobile, internet and IPTV. As of May 2017, the Company had 2.0 million mobile subscribers and 40 per cent subscriber market share in the mobile segment. Since its inception in 1996, MagtiCom has played a major role in development of networks such as GPRS in 2001, 3G network in 2006, satellite broadcasting in 2012, 4G/LTE network in 2015 and 4.5G technology in 2016.
What is our funding objective?
Proceeds to retroactively finance the acquisition of a backbone service provider and regional Internet Service Provider in Georgia, Deltacomm ("Delta"). Delta with its substantial backbone infrastructure and wide geographical presence represents a strong strategic fit with the existing network giving MagtiCom attractive opportunities for regional expansion into underpenetrated areas. MagtiCom targets to enter 57 regions of Georgia to offer internet and Internet Protocol television (IPTV) services. MagtiCom has received permission for the acquisition from the regulator.
Why do we fund this investment?
The project is expected to have a positive transition impact through supporting expansion through improving broadband penetration in the regions of Georgia and competition in the broadband internet market. This is important in the context of the relatively low national fixed broadband penetration of about 16per cent. This transaction also contributes to FMO strategy, by contributing to Sustainability Development Goals 1, 8, 9 and 10.
What is the Environmental and Social categorization rationale?
The project was categorized B under FMO Environmental and Social Policy. Telecommunication operations such as this project are unlikely to be associated with significant environmental or social impacts. FMO relies on EBRD’s E&S due diligence and monitoring for this client. EBRD’s involvement in the project has resulted in improved HR capacity and more systematic environmental, health, safety, and social (EHSS) management. Workers and public grievance mechanisms in particular have been improved.
More investments
| Date | Total FMO financing |
|---|---|
| 7/11/2019 | USD 25.00 MLN |
- Website customer/investment
- http://www.magticom.ge
- Region
- Europe & Central Asia
- Country
- Georgia
- Sector
- Infrastructure, Manufacturing and Services
- Effective date
- 10/5/2017
- End date
- 10/3/2019
- Total FMO financing
- USD 10.00 MLN
- Funding
- FMO NV
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B