Communications infrastructure company IBC Unlimited announced today the signing of a financing agreement with Migdal Insurance and Finance and Discount Bank to provide an additional credit line of NIS 450 million. The financing will be equally provided by Migdal and Discount. The financing agreement represents another layer in the cooperation between Migdal and IBC Unlimited, within which Migdal provided IBC with credit totaling approximately NIS 700 million between 2020 and 2023 in two separate transactions. The company utilized the credit to finance investments in the deployment of the fiber optic network infrastructure that the company is installing throughout the State of Israel.
The new agreement is intended to finance the expansion of the company’s fiber optic network deployment, following the decision of the IBC board of directors to update the company’s business plan, in which the fiber network will be expanded from 1.7 million households to 2 million households – 300,000 households beyond the company’s regulatory obligation.
The new financing totaling NIS 450 million will be provided to the company over the next two years, in accordance with the progress rate of the company’s fiber infrastructure deployment, and will be repaid in regular installments until 2034. The total cumulative credit that will be provided to the company is approximately NIS 1.2 billion.
The financing was provided to the company on the basis of the IRU agreements signed by IBC with HOT and Celcom, which are the controlling owners of the company, together with the Israel Infrastructure Fund for a period of 15 years, under which the companies purchased permanent usage rights (of the Take or Pay type) for at least 40% of the fiber infrastructure that the company will install, which provides the company with a significant and stable revenue stream throughout the 15 years of the agreement, and is the primary source of loan repayment.
IBC Unlimited is controlled (70%) in equal parts by HOT, Cellcom, and Israel Infrastructure Fund and by the Israel Electric Company (30%). The company’s advanced fiber optic infrastructure currently allows surfing at a speed of up to 10GB using the most advanced technology in the world – XGS-PON – to any address connected by the company. The company’s fiber optic network currently reaches over 1,400,000 connected households in 161 localities across the country, from Kiryat Shmona in the north to Eilat in the south.
Yossi Haver, CEO of IBC Unlimited: “The agreement expresses Migdal and Discount’s expression of confidence in IBC Unlimited and the advanced communications infrastructure that will form the basis of all economic activity in the Israeli economy: health, education through communication applications for long-distance learning in homes, for residents employed in remote employment, and more. The agreement will help continue to bring high-speed internet and the spirit of competition to every home in Israel, by enabling connectivity via all Internet providers.”
Erez Migdali, Director of the Investments Division at Migdal Insurance and Finance, said: “We are delighted to cooperate with IBC once again and increase the scope of our financing for the company’s optical fiber deployment project in Israel to a total of NIS 1 billion, which indicates our high degree of trust in the company and its activities, and in light of the impressive growth in its activity and the execution of its business plan. We are also delighted that Discount Bank joined us in this credit agreement and are happy to cooperate with them. This financing transaction joins transactions amounting to billions of shekels carried out by Migdal in recent years in the field of communications infrastructure, in which Migdal financed the deployment of fiber optic networks in Europe, communication towers, and the construction and operation of data centers around the world.”
Hila Eran-Zik, head of the business division at Discount: “We are proud to accompany IBC in its growing and impressive activity in the field of optical fiber deployment in Israel. The business division of Discount is proud to accompany and support companies that drive the development of the economy and lead to economic and social growth in Israel. The cooperation with Migdal in this transaction is part of the implementation of the bank’s strategy for cooperation in financing transactions with institutional bodies.”
