Presentation is loading. Please wait.

Presentation is loading. Please wait.

Co:888193.1Co:888193.1 ALLEN & OVERY Financing telecom companies: the European angle and experience Laurence Jacobs Allen & Overy 29th October, 2001

Similar presentations


Presentation on theme: "Co:888193.1Co:888193.1 ALLEN & OVERY Financing telecom companies: the European angle and experience Laurence Jacobs Allen & Overy 29th October, 2001"— Presentation transcript:

1 Co: Co: ALLEN & OVERY Financing telecom companies: the European angle and experience Laurence Jacobs Allen & Overy 29th October, 2001

2 Co: Co: ALLEN & OVERY Introduction - Allen & Overy Global practice - 24 offices 400 partners worldwide - finance, corporate, capital markets 200+ CMT lawyers worldwide

3 Co: Co: ALLEN & OVERY Introduction - Allen & Overy Leading telecom finance practice In 2000, advised on £100bn + telecom finance deals 3G bids (Wind, Mobilcom, Telefonica, Telecom Italia, Hutchison, Deutsche Telecom, One2One)

4 Co: Co: ALLEN & OVERY Introduction - Allen & Overy Investment grade deals (Vodafone - Mannessman, Racal - Global Crossing, KPN Finacings) Vendor financing

5 Co: Co: ALLEN & OVERY Introduction - key issues in European telecom finance 3G licensing Impact of licence fees Debt finance and taking security Vendor financing Managing the risk New structures

6 Co: Co: ALLEN & OVERY CountryLicence IssuedLicensing ProcessNo. of LicencesTotal Price UKApril 2000Auction bn GermanyAugust 2000Auction bn FranceJuly 2001Beauty contest and 4 (only 2 out of bn + admin fees paymentsuccessfully issued at first attempt) 2 1. First 3G licences issued 2. Only 2 operators bid in the initial beauty contest. The French government are currently attempting to issue the remaining licences 3G Licensing - licence fees

7 Co: Co: ALLEN & OVERY 3G Licensing - costs Average price per person, in euros

8 Co: Co: ALLEN & OVERY 3G Licensing - debt burden Debt of the major European telecoms companies bn Source: Standard & Poor's

9 Co: Co: ALLEN & OVERY 3G Licensing - rollout requirements Licence requirements UK 80% coverage by 2007 Germany 30% coverage by 2003; 50% coverage by 2005

10 Co: Co: ALLEN & OVERY 3G Licensing - debt finance Limited recourse finance Taking security over 3G licences Sponsor support/guarantee corporate security

11 Co: Co: ALLEN & OVERY 3G Licensing - costs/debt control Disposal of non strategic assets Outsourcing Securitisation Infrastructure sharing

12 Co: Co: ALLEN & OVERY Vendor finance - growth in the vendor finance market win sales competitive pressure develop customer relationships open new markets to make money from finance

13 Co: Co: ALLEN & OVERY Vendor finance - structures for vendor finance unsecured extended payment terms medium term finance (loan) operating lease finance lease vendor supported third party finance

14 Co: Co: ALLEN & OVERY Structures for Vendor Finance (A)Unsecured extended payment terms Supply Supplier Finance Supplier Customer Deferred Payment

15 Co: Co: ALLEN & OVERY Structures for Vendor Finance (cont'd) (B)Medium term finance (loan) Supply Supplier Finance Supplier Customer Payment Security? Loan

16 Co: Co: ALLEN & OVERY Structures for Vendor Finance (cont'd) (C)Operating lease Payment Periodic rentals Supplier Finance Supplier Customer Operating lease Supply

17 Co: Co: ALLEN & OVERY Structures for Vendor Finance (cont'd) (D)Finance lease Payment Lease rentals (amortise purchase price) Supplier Finance Supplier Customer finance lease Supply

18 Co: Co: ALLEN & OVERY Structures for Vendor Finance (cont'd) (E) Vendor supported third party finance Purchase Price Supplier Finance Supplier Customer Supply Bank Counter indemnity Security? Loan Guarantee

19 Co: Co: ALLEN & OVERY Vendor finance - commercial issues credit exposure intercreditor issues customer relationship costs tax and accounting

20 Co: Co: ALLEN & OVERY Vendor finance - legal issues regulatory compliance due diligence security conflict between role of supplier and lender

21 Co: Co: ALLEN & OVERY Vendor Finance - pay as you grow Capacity based PAYG Utilisation based PAYG

22 Co: Co: ALLEN & OVERY Conclusion Financiers challenge the business model focus on security Operators and manufacturers challenge the business model cost management


Download ppt "Co:888193.1Co:888193.1 ALLEN & OVERY Financing telecom companies: the European angle and experience Laurence Jacobs Allen & Overy 29th October, 2001"

Similar presentations


Ads by Google