IFC FUND FOR DIALOG >>>>>~>

IFC Commits US$ 100 Mn to Dialog Telekom Will Support Sri Lanka’s Telecom Infrastructure Colombo, Sri Lanka, September 24, 2007— IFC, a member of the World Bank Group, will provide financing to Dialog Telekom PLC in Sri Lanka to expand its telecom network and build new telecommunication infrastructure networks. The US$100 million package includes a US$ 70 million term loan facility and a US $30 million equity commitment via the acquisition of a 1.6 percent holding in Dialog from Telekom Malaysia (TM). The loan facility will enable Dialog to improve public access to affordable and reliable telecommunication services by increasing capacity and extending coverage, particularly in rural and under served areas. The US $30 million equity commitment will also facilitate a potential improvement of liquidity for DIAL shares in the market. The funding will be deployed towards partially financing Dialog Group’s “quadruple play strategy”. A significant portion of the proceeds via the debt financing will be channeled towards augmenting coverage and capacity in the mobile network in order to consolidate and grow market leadership and product leadership in the segment. Investments will also be made in the Fixed line, Broadband and Digital Television media businesses. These beachhead investments would establish a solid platform for the Dialog group to benefit from the burgeoning mobile market as well as from growth in relatively under served segments such as Broadband Internet, Enterprise Solutions, Fixed Telephony and Digital media leveraging on infrastructure and convergent technology platforms. The IFC SouthAsia Enterprise Development Facility (SEDF) will also assist Dialog in implementing its Distributor Retailer Community Network. This will involve imparting better business skills to retail distributors to help them access credit from commercial banks and improve sales. Several policy initiatives and reforms since the 1990s, including the establishment of an independent Telecommunications Regulatory Commission, reflect the Sri Lankan government’s strong commitment to liberalize rapidly. While fixed line penetration remains low, at 10 percent, mobile penetration has risen from 4 percent in 2002 to 30 percent today, equivalent to 5.96 million subscribers. Projections show about 10 million subscribers by 2010, based on expanded coverage and declining tariffs, which are among the lowest in the world. Yusof Annuar Yaacob - Chief Executive Officer of TM International Sdn Bhd, Dialog Telekom PLC’s majority shareholder, said, “IFC’s renewed support to Dialog at a critical juncture in its expansion is very encouraging and contributes significantly to our commitment to investing over $450 million in Sri Lanka over the period 2006 to 2008.” Dr. Hans Wijayasuriya, Director and Chief Executive, Dialog Telekom, added, “We are delighted that IFC has reinforced its commitment to Dialog’s growth story. Building on the relationship seeded in 2004 through a long term financing arrangement, we are strongly encouraged that IFC has increased its participation in Dialog in the form of equity and expanded debt financing. We are also appreciative of the high degree of market sensitivity displayed by IFC in structuring a tailor made financing package to meet the company’s needs and opportunities”
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Paolo M. Martelli, IFC Director for South Asia, said, “IFC’s support to Dialog, comprising both long-term finance and advisory services, is an important milestone for our presence in Sri Lanka. It demonstrates our commitment to facilitating private sector development, which in this case will help address the country’s growing infrastructure needs.” Gilles Galludec, IFC’s Country Manager for Sri Lanka and Maldives and Program Manager at SEDF, explained, “We are excited by the company's strategy and its country-wide entrepreneur development program. We are keen to back the program actively, as it aligns with our larger role of developing small and medium enterprises.” IFC’s Head of Investments for Sri Lanka and Maldives, Jeetendra Marcelline, added, “IFC sees Dialog as a key partner in Sri Lanka. The teams worked closely on the new package, which helps address a multitude of Dialog’s needs.” About IFC IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org. IFC in Sri Lanka Since 1970, IFC has committed over $200 million in 26 projects in Sri Lanka. Currently IFC has an exposure of over $90 million in Sri Lanka in equity, debt, and guarantees, with exposure to private infrastructure exceeding $60 million. In 2007, IFC committed over $20 million in new investments in Sri Lanka, including over $10 million to local financial institutions under its Global Trade Finance Program. The IFC SouthAsia Enterprise Development Facility in Sri Lanka, a $5 million facility funded by IFC and the governments of Netherlands and Norway, is part of a multidonor-funded facility managed and operated since 2006 by IFC. It helps increase access to finance and quality business development services to projects in the country. IFC SEDF also helps create a business-enabling environment and supports value addition to firms through tailored advisory services, capacity building programs, training, and research.