MTN Nigeria has, on Wednesday, signed a 7-year N200 billion medium-term loan facility with a consortium of 12 Nigerian banks. This was deemed necessary in a bid to improve its network and services and also facilitate its planned expansion, especially in the rural areas of Nigeria.
— Nairametrics (@Nairametrics) August 15, 2018
The consortium of banks includes Citibank Nigeria, Diamond Bank Ecobank, Fidelity Bank Plc, First Bank Plc, First City Monument Bank (FCMB), FSDH Merchant Bank, Rand Merchant Bank, Standard Chartered Bank, Stanbic IBTC, United Bank for Africa (UBA), and Union Bank.
With FBNQuest acting as the facility agent, the medium-term loan facility denominated in Naira is structured for 7 years–a 2-year moratorium (MTN would not commence a repayment of the loan during this period) and a repayment plan of 5 years. This means the loan is expected to be fully repaid by 2025, which is enough time for MTN to have carried out its plans.
Why the Need for a Loan Facility?
Ultimately, the loan is expected to help the operator deepen and broaden the provision of telecom services in the country, providing better quality services to its customers of over 60 million Nigerians.
It is also expected to enable MTN to fund it’s capital expenditure portfolio, working capital, and other evolving business opportunities, especially in terms of delivering better data services.
During the signing, MTN’s CEO, Ferdi Moolman said, “the facility will enable us to evolve the network to deliver convergent and superior quality, drive voice capacity expansion and data service penetration.”
The partnership will also make it possible for people to connect with each other and the world, find and share information and ideas, create and access new digital services and reimagine old services. It puts in place infrastructure that empowers commerce, industry and the provision of public services.
Although there are no clear indications as to when the telco will carry out its Initial Public Offering (IPO). Even with a go-ahead from the Securities and Exchange Commission, the telco says that it would get listed when the market condition is right.
If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.
Get latest Technology news, reviews, business-related content with a deliberate emphasis on the African narrative and insightful analysis in Nigeria – straight to your inbox.