First Bank, Zenith Bank, Five Others Grant MTN Nigeria N200bn Loan

By Dipo Olowookere

A seven-year credit facility worth N200 billion has been granted to leading Information and Communications Technology (ICT) company, MTN Nigeria Communications Plc.

The signing of the loan, according to MTN Nigeria, was done on Friday at the law offices of Aluko & Oyebode in Ikoyi, Lagos, in the presence of key partners and other stakeholders.

This is coming a day after the telecom firm with over 60 million subscribers in Nigeria listed 20.4 billion of its shares on the Nigerian Stock Exchange (NSE) by introduction.

A notice by the company to the NSE yesterday disclosed that the facility was granted by a consortium of seven local banks, with Citibank acting as co-ordinator and Quantum Zenith as Facility Agent.

The lenders include Access Bank, Guaranty Trust Bank, Zenith Bank, Fidelity Bank, First City Monument Bank, United Bank for Africa, and First Bank.

MTN Nigeria Plc explained that the Medium Term Facility will enable it fund its evolving business opportunities while assisting with capital expenditure and working capital, to deliver enhanced customer service.

“It follows the successful establishment of a similar seven year, N200 billion facility by MTN in 2018 and forms part of the company’s wider programme to raise domestic debt,” the notice said.

Speaking at the signing, Chief Executive Officer of MTN Nigeria, Mr Ferdi Moolman, expressed enthusiasm at the completion of the agreement, saying it signposts the company’s commitment to and confidence in Nigeria, and the strength of the strategic collaboration between MTN Nigeria and local financial institutions, that will help deepen and broaden the provision of ICT services in Nigeria:

“This facility expands our existing successful domestic debt programme which we are using to fund increased network capacity, and the expansion of both the voice and data services on our network to customers in new areas, and with new next generation services.

“We have enjoyed remarkable funding support from Nigeria’s financial institutions since our first facility in 2003 and this has been critical to the development of one of the largest telecoms network in Africa, with over 60m subscribers.

“I am delighted that, so soon after our successful listing on the Nigerian Stock Exchange, we are able to compliment it with such an important addition to our portfolio of debt.”

Mr Moolman lauded the participating financial institutions for staying committed to MTN Nigeria, stressing that the loan syndication showcases the strength of the Nigerian financial institutions and their confidence in firm’s vision, as well as both parties joint ability to stimulate significant economic growth.

The facility is structured with a 2-year moratorium and a repayment plan of seven years and is denominated in Naira. It is the eighth syndicated loan agreement by MTN in Nigeria since its inception 18 years ago.

Business Post reports that few years ago, a consortium of 13 Nigerian bank granted a loan of $1.2 billion to Etisalat Nigeria, now trading as 9mobile, but the company was unable to repay the credit facility.

This prompted an attempt by the financial institutions to take over the business, but the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) prevented. Instead, they appointed an interim board to pilot affairs of the fourth largest telecom firm until a new buyer, Teleology, was sourced for.