Lattelekom scores 50 million euros from EIB

RIGA (BNS) - Telecommunications monopoly SIA Lattelekom will get a 50 million euro loan from the European Investment Bank (EIB) for updating and expansion of the telecommunications network during the coming three years.

The term of the credit is ten years while the interest rate has not been fixed. Lattelekom will be able to get the funds in tranches.

Lattelekom's president, Guntars Strautmanis, said this is a

"passive loan" for which the company would not pay interest before it begins using it.

IStrautmanis said to get the loan, the company still needs a guarantee from an internationally acknowledged bank which would not cause any difficulties to Lattelekom.

He said the company will be looking for a credit guarantor when it needs the financing extended by EIB.

EIB's representative told reporters the bank favors the possibility to offer credit to Lattelekom because it is satisfied with the telecommunications development plan worked out by Lattelekom.

Transport Ministry official Inara Rudaka praised the credit contract entered into by Lattelekom saying that internationally acknowledged banks are extending big loans only when they are convinced about stability of the respective company.

Lattelekom closed a contract on the extension of the above loan with EIB in December 1999.

This is the biggest loan ever extended by EIB to a Baltic states company.

"Granting of the loan indicates that Lattelekom is a stable and internationally acknowledged company. Because of successful economic operations, Lattelekom did not need financial guarantees from the state to get the loan," a statement said.

The loan from EIB will be the second largest by Lattelekom. In 1997 The monopoly entered into a contract with The Sumitomo Bank on opening a multi-currency credit facility in the amount of $60 million .

Lattelekom also has taken out smaller loans from several Latvian banks, worth a total of 27.5 million lats ($47 million).