EBRD and TIW Conclude a US$ 190 Million Loan for the Expansion of Romania's CONNEX GSM.

MONTREAL--(BUSINESS WIRE)--Oct. 2, 1997--(ME, TSE TIW ) The European Bank for Reconstruction and Development (EBRD) has arranged and partially financed a US$190 million loan facility to the digital cellular operator, MobiFon S.A., the consortium led by Telesystem International Wireless Inc. (TIW) of Canada and AirTouch Communications of the United States. The package includes the first major syndicated long-term loan for a private Romanian company, establishing an important benchmark for future deals in the country.

With the proceeds, MobiFon will expand its existing GSM network, which it launched in April this year, five months after being granted the operating license. Al Tolstoy, President and CEO of MobiFon, commented: "After having completed the fastest world-wide launch of any GSM system between license award and commercial operation, we are continuing to see strong growth in subscriber numbers and usage of the system. There is tremendous pent-up demand for our service."

Peter Reiniger, Director of the EBRD's Telecom team, said: "In a country where current telephone penetration is still relatively low, the EBRD's financing means greater access to telecommunication systems of international standards for the Romanian people. Such systems can facilitate greater economic activity as well as a more rapid development in infrastructure."

The EBRD package comprises a senior loan of US$135 million, of which the EBRD is providing a US$65 million nine-year tranche and has syndicated a US$70 million eight-year tranche to seven commercial banks. The Bank is further providing US$10 million in subordinated debt. Two parallel loans totalling US$45 million are being funded with the same terms and conditions as the EBRD nine- year tranche from the Canadian Export Development Corporation and the Nordic Investment Bank. This is the first time that these institutions have participated in a commercial Romanian financing.

"We are very pleased to have concluded this major credit facility with this consortium of international lenders for our Romanian company, MobiFon", commented Pierre Fitzgibbon, Chief Financial Officer of TIW. "This long-term project financing provides the conerstone for growth of one of TIW's key operations."

Noreen Doyle, Director of the EBRD's Commercial Co-financing unit, said: "Until today, there has been no substantial medium or long- term financing available in Romania. What there was has been backed by export credit agencies, international financial institutions or government guarantees. The commercial banks' interest in MobiFon highlights an important milestone for Romanian debt and is a strong signal of future activity in the country. We are encouraged that the market has accepted such long maturities for what is a start-up operation."

Since launching the service on 15 April 1997, MobiFon under its brand name CONNEX GSM, has connected over 40,000 subscribers and now covers 30 per cent of the population. MobiFon currently employs 550 people. Future coverage is to include all major cities, European and national roads, the railways and all international and national airports.

MobiFon S.A. is a consortium of North American and Romanian partners: Telesystem International Wireless Inc. from Canada, the principal shareholder with 60 per cent, AirTouch Communications from the United States plus, from Romania, LOGIC Telecom S.A., Ana Electronic, ISAF, Posta Romana and the Romanian Investment Fund. TIW and AirTouch both have extensive experience in the construction and operation of cellular networks.

TIW is a global wireless operator with cellular operations in developing markets such as China, India, Romania and Brazil, specialized wireless services in developed markets such as the United Kingdom, France, Germany and Spain, and paging operations in Mexico and the Netherlands. TIW is a Canadian public company whose shares are listed on the Montreal Exchange and the Toronto Stock Exchange under the symbol "TIW".

CONTACT: Telesystem International Wireless Inc.

MICHELE BEAUBIEN, 514/397-8478

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