UOB Malaysia provides financing to Ericsson Malaysia

KUALA LUMPUR: United Overseas Bank (M) Bhd (UOB Malaysia) has provided a first tranche financing in the form of an RM800mil receivables purchase arrangement (RPA) to Ericsson (Malaysia) Sdn Bhd.

UOB Malaysia, in a statement said, this would enable Ericsson Malaysia to deliver the initial phases of Digital Nasional Berhad (DNB)’s nationwide 5G network rollout.

Additionally, UOB Malaysia has also been mandated as the lead arranger for an additional RM2.3bil syndicated RPA for potential financial institutions (FIs).

Upon acceptance of the syndicated RPA by the participating FIs, a total of RM3.1bil will be raised in support of the supply, delivery and management of DNB’s entire 5G network.

UOB Malaysia deputy chief executive officer Ng Wei Wei said the financial arrangement would 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,” she said.

As part of the agreement to supply, to deliver and to manage DNB’s 5G network and based on its experience of raising funds for infrastructure projects in other markets, Ericsson Malaysia is helping to arrange the financing of network equipment from foreign and domestic financial institutions.

“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.

“The launch of 5G in Malaysia will serve as an economic multiplier and accelerate the transformation of the country into a digitally empowered society and knowledge economy,” David Hägerbro, head of Ericsson Malaysia, Sri Lanka and Bangladesh said.