MTN Telecommunications Nigeria Limited, today, signed a ₦200 billion major loan deal with twelve Nigerian banks. The medium-term loan will help facilitate the company’s expansion plans, particularly the expansion of its operations into underserved parts of Nigeria such as villages.
The 12 banks are Diamond Bank Plc, Fidelity Bank Plc, First Bank Nigeria Plc, Standard Chartered Bank Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, and Unity Bank of Nigeria Plc.
Citibank Nigeria Limited, Ecobank Nigeria Plc, First City Monument Bank Plc, FSDH Merchant Bank Limited and Rand Merchant Bank Nigeria Limited were also part of the deal.
The loan comes with a two-year moratorium and a five-year repayment plan. These are favourable conditions that will enable MTN to make good use of facility towards the actualisation of the objectives for which the deal was sealed. The loan facility is also denominated in naira.
MTN is one of the biggest telecommunications operators in Nigeria, controlling some 41% market share with its over 60 million subscribers.
But the company has also been embroiled in a major controversy. In 2015, it was fined ₦1.04 trillion by Nigeria’s Communications Commission (NCC) following the uncovering of evidence that it abused some operational guidelines; including the irregular registration of subscribers. The fine was later reduced to ₦330 billion after months of negotiation.
While the company has over time made meaningful progress to pay off the fine, it has yet to meet the other requirement given to it by the NCC to list on the Nigerian Stock Exchange. This is despite the permission granted by the Securities and Exchange Commission for the initial public offering (IPO) to take place soon.
Consequently, the MTN IPO has been highly anticipated and speculated as well, with many unsure when it will actually be taking place.
Meanwhile, as we reported, the NCC recently gave May 29, 2019, as the deadline for the telco to list on the Nigerian bourse.
It is important to note that the telecoms company has positive prospects, especially with its recently-released result which shows an impressive performance.