Telecommunications giant MTN has announced plans to raise $1.1 billion debt in Nigeria this year. According to Bloomberg, the new debt will be used to fund local investment and replace existing debt.
The reason for the bond offer
Ralph Mupita, Chief Financial Officer, MTN Group, stated that the company plans to shift its focus from dollar-denominated debt to debt in local currencies where it operates.
In his words:
“We want to gear up our debt on an operational level away from the holding structure, the debt must be where the Ebidta is and we want to raise as much as possible in local currency.”-he said
Talks are already at an advanced stage on its planned listing on the Nigerian Stock Exchange. The Initial Public Offering (IPO) will raise about $500 million when it is finally listed on the Nigeria Stock Exchange later this year.
The Initial Public Offering (IPO) was one of the conditions MTN agreed to settle the $1 billion fine imposed on it by the Nigerian Communications Commission (NCC) in 2015.
MTN Group in its recently released financial statements results for the first quarter ended 31st March 2018 showed an increase in subscriber base by 1.9 percent quarter-on-quarter with net additions of 4.1 million, while the group’s data revenue was also up by 26.9 percent.
MTN Nigeria currently has 52.3 million subscribers with 57% market share by revenue with 14.1 million active data users and 2 million mobile money customers. It also reported an additional 2.3 million subscribers in the quarter as against 2.0 million addition in 4Q17.
Interestingly, there are strong indications that Nigeria’s securities regulator may be preparing for record bond issuance from companies seeking to benefit from lower interest rates and improved economic indices in the country.
Nigeria has been in a corporate bond bonanza in the last two years as companies exploit an increasing appetite for corporate debt issuance from yield hungry investors.
MTN Group is a South-Africa based multinational mobile telecommunications company with its headquarters in Johannesburg and operates in over 20 countries.