UOB Malaysia will play the financing bank role as it has provided a first tranche financing in the form of an RM800 million Receivables Purchase Arrangement (RPA) to Ericsson Malaysia for the country 5G network rollout managed by Digital Nasional Berhad.
With the rollout set to take place in phases, the bank is also providing an additional RM2.3 billion syndicated RPA for potential financial institutions. Upon acceptance of the syndicated RPA by the participating FIs, a total of RM3.1 billion will be raised in support of the supply, delivery and management of the entire 5G network.
DNB, an entity wholly owned by the Minister of Finance, has been mandated to be the single neutral party to undertake the accelerated deployment of 5G infrastructure and network nationwide. It is licensed under the Communications and Multimedia Act 1998 to provide wholesale 5G coverage and capacity to licensees under the Act.
Ms Ng Wei Wei, Deputy Chief Executive Officer, UOB Malaysia, hailed the appointment as a landmark financial arrangement and is optimistic in DNB’s 5G network rollout strategy.
“The financial arrangement will enable Ericsson Malaysia to meet its contractual obligation and to support DNB’s mandate to build, to own and to operate the national 5G network. This initiative has been identified as a key catalyst for Malaysia’s digital economy aspirations. The financing is also testament to UOB’s expertise in structuring complex financing of such size for infrastructure projects.”
As part of the agreement Ericsson Malaysia is helping to arrange the financing of network equipment from foreign and domestic financial institutions. Mr David Hägerbro, Head of Ericsson Malaysia, Sri Lanka and Bangladesh, said, “The early infusion of funding by UOB Malaysia provides Ericsson with a strong cash flow in the early phase of 5G network deployments in Malaysia.
According to DNB CFO Nik Azlan Aziz, the balance Syndicated RPA facility of RM2.3 billion which, together with the first tranche of RM800 million, will form part of the estimated total working capital facilities of RM5 billion required by DNB until 2024 to roll out the planned 5G network. It is intended that these facilities will be replaced by a long term Sukuk Programme for which DNB has received strong indications of interest from potential lenders.
.
