Bloomberg News

EAccess Hires JPMorgan, Mizuho for $1.9 Billion Loan

February 10, 2006

EAccess Ltd. (9427), Japan's third-largest Internet services provider, is seeking a 220 billion yen ($1.9 billion) loan to fund a high-speed mobile phone network, bankers involved in the loan said.

EAccess, whose mobile phone unit is 26.4 percent owned by Goldman Sachs Group Inc. (GS:US), plans to use the funds to help build the network, said the bankers, who declined to be named. JPMorgan Chase & Co. (JPM:US) and Mizuho Corporate Bank Ltd. are arranging the two-part loan, maturing in five and seven years.

The Japanese government in November granted wireless licenses to eAccess, Softbank Corp. (9984) and IPMobile Inc., opening the nation's 8.5 trillion yen mobile phone market to competition for the first time in more than 12 years. The companies plan to introduce new types of handsets and services to win market share from existing operators NTT DoCoMo Inc. (9437), KDDI Corp. (9433) and Vodafone Group Plc (VOD)'s local unit.

``This shows that eAccess has a plan and is on track,'' said Kirk Boodry, a telecommunications analyst at Dresdner Kleinwort Wasserstein in Tokyo. ``Debt financing would help improve the investment return on the project.''

JPMorgan and Mizuho are inviting other lenders to join the loan by early March, said the bankers. EAccess held a presentation with banks this afternoon. The credit will have revolver and term loan portions. Money in a revolving credit can be borrowed again once it's repaid; in a term loan, it can't.

Goldman Sachs

``There are no new developments we can announce about financing our mobile phone operations,'' said eAccess spokesman Takashi Igarashi in a telephone interview today. ``We've already said we need about 400 billion yen in funds for mobile phones, including 300 billion yen in lease financing or loans.''

Goldman Sachs last year spent 27.5 billion yen to buy shares in eAccess' mobile phone unit. Tokyo Broadcasting System Inc., Japan's third-largest broadcaster, controls a 9.6 percent holding in the wireless unit. Goldman Sachs Tokyo-based spokesman Yoshihide Nakagawa declined to comment on the loan.

Seventy-one percent of Japanese own a mobile phone, which is below the average for countries in the Organization for Economic Cooperation and Development, eAccess Chief Executive Sachio Semmoto said in France Nov. 23. That is partly due to above-average calling costs, which can be $0.85 a minute, he said. The 3G services allow users to download music and video files as well as conduct video conferencing on a faster network.

EAccess is aiming to provide network coverage to more than 85 percent of Japan's population within two years, Semmoto said in November.

To contact the reporters for this story: Patricia Kuo in Hong Kong at pkuo2@bloomberg.net; Aiko Wakao in Tokyo at awakao@bloomberg.net.

To contact the editors responsible for this story: Teo Chian Wei at cwteo@bloomberg.net; Gavin Serkin in London gserkin@bloomberg.net


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    (Goldman Sachs Group Inc/The)
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  • JPM
    (JPMorgan Chase & Co)
    • $60.94 USD
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