MTN Nigeria gets $3b loan from consortium of banks to expand network
LAGOS: MTN Nigeria, a leading Information and Communications Company on Tuesday secured loan facilities of US$3 billion (about N470 billion) from a consortium of 24 local and international financial institutions to enable it further expand, modernize and improve its network infrastructure.
The loan which consists of US$1.8 billion in additional facilities and US$ 1.2 billion in restructured existing Local Facility was formally sealed by top officials and Board Members of the company and the participating banks at Eko Hotel, Lagos.
MTN CEO, Mr. Brett Goschen, said, the signing of the loan deal signposts another strategic collaboration between MTN Nigeria and local and international financial institutions, aimed at deepening telecommunications services in Nigeria.
According to him, the deal was the sixth of such strategic partnerships, with other notable ones including a facility of US$170 million Commercial Paper Facility secured by the company in 2002 and $395 million Medium Term Facility in 2003.
He said the 2003 deal was the largest African telecoms funding deal to close outside of South Africa at the time and won Project Finance magazine’s “African Telecoms Deal” for that year.
“In 2007, MTN Nigeria again partnered with various local and international financial institutions to raise USD 2 billion to fund our rapidly expanding operations. It was again regarded as the largest loan syndication to any individual telecommunications company in Africa. In that year, it won the ‘African Deal of the Year’ by the EuroMoney Magazine,” he said.
Mr. Goschen recalled that once again in 2010, MTN Nigeria partnered with 15 local financial institutions and two international lenders to raise another USD 2 billion, which was described as the largest corporate financing deal in the whole of sub-Saharan Africa. This deal was awarded ‘Trade Finance Deal of the Year 2010” by the Trade Finance Magazine of the United Kingdom.
“The essence of these deals was to enable MTN to make the necessary capital investments to expand our network infrastructure and meet the growing demands of our customer base. We certainly put that financing to good use, built the most extensive telecommunications network in Africa and grew our customer base to over 50 million subscribers,” he said.
He noted that MTN currently has effective network coverage of more than 85 percent of Nigeria’s land mass and population, and nearly 100 percent coverage of most major highways in the country.
Mr. Goschen said with a relatively low mobile penetration, sound economic growth, lower cost of ownership for consumers and the insatiable demand for data services, there is still ample room for more growth in the sector.
“The restructured and additional facilities will enable us to continue with the aggressive investment in our network,” he said. He stated that the company invested $1.6 billion in 2012 and is investing over US$1.5 billion in 2013.
“Enhancing our network quality is also a key focus of the investment as we lead the delivery of a bold new digital world for our customers,” he said.
Mr. Goschen lauded the participating financial institutions for passing a ‘vote of confidence’ in MTN, stressing that the loan syndication showcases the strength of the Nigerian financial institutions and their ability to stimulate significant economic growth.
He thanked the industry regulator and other government stakeholders, whose support for the industry has led it on the path of continuous growth, making it possible for MTN to record the achievements it has in the last 11 years.
“Most importantly, we thank our esteemed customers who have been our pillar of support since our commencement of commercial operation in 2001. Without you, we definitely would not have been able to achieve this,” he said.
He stated that the company is under a binding obligation to offer good quality of service to its customers and he pledged that the company would strive to meet and exceed the expectations of its customers and other stakeholders.