Axiom Telecom raises $400m to finance expansion

Dubai: Axiom Telecom LLC, the Dubai-based mobile phone retailer, raised $400 million of conventional and Islamic revolving loans from eight banks to finance imports of handsets and accessories.

The 18-month Islamic facility for 605 million dirham ($164.7 million) and a similar maturity loan for $235 million were arranged by lenders including Emirates NBD PJSC, JPMorgan Chase & Co. and Dubai Islamic Bank PJSC, according to Faisal Al Bannai, Axiom's chief executive officer.

“This syndication consolidates all our existing facilities and gives us a group of relationship banks as we look at expansion and possible acquisitions,'' Al Bannai told reporters in Dubai on Thursday.

Consumer spending in the six Gulf Cooperation Council states rose by an annual average 10 per cent for the past four years as the region's population expanded by 3.4 per cent a year and oil earnings spurred economic growth, National Bank of Kuwait research shows.

Axiom, which sells phones made by companies including Nokia Oyj and Motorola Inc., has more than 500 stores in the region, according to a press release on Thursday.

Axiom is expanding in India where consumers buy 60 million mobile phones a year compared with about 8 million in Saudi Arabia, the biggest Gulf market, Al Bannai said. The company formed an equal venture with Pantaloon Retail India Ltd. last year to win share of the Indian market.

The other banks contributing to Axiom's loans were First Gulf Bank PJSC, Noor Islamic Bank, Commercial Bank of Dubai, Emirates Islamic Bank and United Bank Ltd., according to the release. Dubai's state-owned Tecom Investments owns 40 per cent of Axiom.

In a revolving loan, money that's been repaid can be borrowed again. Islamic loans pay an agreed profit rate to lenders instead of interest, which is prohibited Sharia.