The debt will be provided on a project finance basis with a term of 18 months.  This is the largest non-recourse facility for a start-up telecommunications project in the region, and one of the largest in South Africa to date. Attractive terms for the debt have been offered by the financial institutions to ensure that Neotel is allowed adequate time to establish itself in the market. Neotel will re-finance the debt with a long-term facility after 12 months. Nedbank Capital, Investec and the Development Bank of South Africa have been appointed as the mandated lead arrangers for the long-term facility, which will be in excess of R4 billion. The debt is complemented by in excess of R2 billion of equity that will be contributed by the Neotel shareholders. The funds will be utilized for Neotel's network build out. The Neotel network already consists of 1,300km of optic fiber cable in the 6 main metropolitan areas. This infrastructure was purchased from Transnet for R256 million earlier this year.   Neotel currently offers international voice and data transit services for other telecommunications operators. The roll out of additional services is on track and initial enterprise services will be available in December this year. Consumer services in select geographic areas will be offered in April/May 2007. Ajay Pandey, Managing Director of Neotel, said that he was delighted to have Neotel partner with such a reputable funding consortium. The finalization of the funding ensures that Neotel continues to remain on track with the roll out of its promised services. Nedbank Capital, Investec and the Development Bank of South Africa added that they were very pleased to be participating in an innovative and flexible funding structure that is responsive to the needs of Neotel and its shareholders.  The consortium added that they believe that Neotel will bring world-class telecommunication innovation to South Africa through the roll-out of a next generation network coupled with the involvement of Videsh Sanchar Nigam Limited of India, one of the world's leading telecommunications service providers. Mike Peo, head of Nedbank Capital's Infrastructure Project Finance team said that today's signing is a notable achievement on the South African telecommunications landscape, finally enabling South Africa's second network operator to come to market, and Nedbank Capital is proud to have played a significant role in this funding.  "The roll-out of the Neotel network is a fundamentally important milestone in creating a fully competitive market for telecommunications services in South Africa, with all South Africans standing to benefit," said Peo. Fiks Dlamini and Robert Gecelter of Investec Project & Infrastructure Finance said, "We see telecommunications as an essential ingredient to drive economic growth in South Africa. Neotel will increase competition, provide extra services and lower costs of telecommunications essential to business. Ufikile Khumalo, IDC's Vice-President for Resources, Industrial and Utilities, said, "This transaction will stimulate growth and we hope to see increased competition and value-added services in the telecommunications sector. Our participation in the funding of Neotel is a milestone for us and is aligned with our mandate to create competitive industries." TP Nchocho and Lucy Chege of Development Bank of Southern Africa Project Finance added, "We are very pleased to be participating in this groundbreaking transaction because Neotel signifies the beginning of a momentous change in the telecommunications sector. It will bring positive developmental impact and effectively address Government's key priorities through reducing backlogs in the telecommunications sector.  This in turn will improve much needed access to services and enhance service delivery. This is in line with our objective to support economic growth and development." Kagiso Financial Services, in association with Rothschild South Africa, has acted as financial advisers to Neotel. The legal advisor to Neotel is Deneys Reitz, while Bell Dewar & Hall have acted on behalf of the funding institutions.Contact Details:www.neotel.co.za PostNet Suite 612, Private Bag X292052, Gallo ManorJohannesburgSouth AfricaTelephone: +27 11 800 6100Fax: +27 11 800 6162