Netcity Telecom continues the expansion of the underground fiber optic network of Bucharest with a private financing of over 30 million euros
Netcity Telecom has signed on April 19, 2018 an amendment and increase of its EUR 36 million club loan facility with a new facility of EUR 10 million with a syndicate of two banks – the Romanian Commercial Bank and BRD Groupe Societe Generale The credit facility will be used by the company to supplement over 20 million euros already provided by shareholders for further works on expanding the underground fiber optic infrastructure over the next 3 years. Thus, Netcity Telecom estimates that by 2020 private investment will exceed 70 million euros. The length of the network is expected to double, growing to over 1,800 km, and then to increase each year, depending on the needs of the city. Due to network expansions, revenues received by the Bucharest City Hall from royalty payments from Netcity Telecom will double to over 2 million euros per year.
Netcity Telecom is the operator of the namesake network, responsible for financing it 100%, for its implementation and operation, based on a concession contract signed in 2008 with the Bucharest City Hall for a period of 49 years, with an annual royalty of 12% of revenues.
“This partnership is an important step towards providing the full financing required for Netcity’s expansion plans over the next 3 years, and reconfirms our commitment to providing a long-term telecommunications infrastructure appropriate for the needs and expectations of the city’s inhabitants. At the same time, it is a sign of confidence from banking institutions in terms of company strategy”, said Adrian Răcăşan, Chief Executive Officer, Netcity Telecom, after signing the financing agreement.
Expansion of the network will increase the number of streets whose telecom cable networks will be migrated to the underground. This will help improve the quality of telecommunication services, provide infrastructure support for smart-city services, reduce the risk of accidents caused by illegal and chaotic cable layings, and improve the overall urban appearance.
Netcity Telecom would like to thank all of Bucharestțs residents for the patience and support they have shown throughout the construction of the network.
About Netcity Telecom
Netcity Telecom was fully acquired in February 2017 by the telecom operator Direct One S.A., both of which are now part of the Electrogrup Infrastructure S.A. holding, which was established in December 2017.
Banca Comerciala Romana (BCR), member of Erste Group, is the most important financial group in Romania. BCR is the No. 1 bank in terms of the number of customers and the No. 1 bank in terms of saving and lending segments. BCR is the most valuable financial brand in Romania, in terms of customer confidence and the number of those for whom BCR is the main banking institution.
BRD – Groupe Société Générale has 2.33 million active customers and operates a network of 760 units. BRD has a leading position on the card market with approx. 2.3m cards and a network acceptance of approx. 28,800 POS and more than 1,500 ATMs. Total assets of the Bank at end 2017 amounted to RON 53.5bn.
BRD is part of the Société Générale Group, one of the largest European financial services groups. The group has 145,000 employees in 66 countries and 31 million customers worldwide in its three key activities:
- Retail banking in France
- International Retail Banking, Financial Services and insurance
- Corporate and investment banking, private banking, asset management and securities services