CamGSM secure $50M for network expansion
LOCALLY-owned and listed mobile provider CamGSM has entered into a facility agreement with Deutsche Bank Ag’s Singapore branch, securing a $50 million loan to fund its network expansion.
According to a December 26 filing to the Cambodia Securities Exchange (CSX), Deutsche Bank will provide $50 million, with a 10-year loan period from 22 December 2023 to February 1, 2034.
Hong Sokhour, CEO of the CSX, told The Post on December 26 that although the company is listed, they still can take financing or loans from any source to support their business’s growth.
“Normally, listed companies still have ability to take loans or other financing from other financial institutions to support their business expansion, as they cannot use the funds they raised from the capital market alone to support their business. Financial operators clearly understand debt and share it in order to make their profit-tocapital ratio better,” he said.
“Their debt level causes no concerns for a large company like CamGSM, as they will have excellent ability to manage debt. For instance, for the bank, the central bank requires capital of not less than 18 percent of total assets,” he added.
“Of course, I don’t deny that an increase in debt of any listed companies will pose some risk for shareholders and investors. We need to see what level of debt and how the company will use it to create more revenue. This means that just because we see debt increase, we don’t have to be concerned. This increased debt is used for their business expansion, so their revenue will increase,” he explained.
According to the CSX, with the loan, CamGSM’s total debtto-equity ratio is 182.07%.