The Nigerian unit of the MTN Group yesterday signed a ₦200 billion (about $554.43 million) medium-term loan facility provided by a syndicate of local financial institutions.
During the signing ceremony which took place at the law offices of Aluko & Oyebode in Lagos, Nigeria, key officials from the participating financial institutions were in attendance, as well as partners and stakeholders.
MTN Nigeria CEO, Ferdi Moolman, while commenting on the loan, applauded the participating financial institutions for their commitment.
Moolman further stated that the participation of the local banks is an indication of the strength of the Nigerian financial institutions to stimulate significant economic growth in the country.
Here’s what we know about the new loan facility that MTN Nigeria — the largest telecom operator by subscriber base — got.
The Chief Financial Officer, Finance Division of MTN Nigeria, Adekunle Awobodu says the loan facility is to enable the telecom operator to fund its capital expenditure.
Despite having invested heavily in the past, MTN Nigeria is still keen on putting in more funds, as the new loan facility would also be used to expand its capital expenditure portfolio.
It is believed that the loan would further position the telco to deliver better data services since the market is already shifting from voice services to data.
Suggested Read: MTN Group invested ₦225 billion in Nigeria in 2017
It’s a 7-year tenure loan
The loan — which is denominated in Naira — is for a seven-year tenure. MTN Nigeria won’t commence repayment of the loan until after two years which is the moratorium period of the loan.
The tenure of the repayment plan is five years.
The syndicate of banks
The ₦200 billion is provided by a syndicate of local financial institutions which include Citibank Nigeria Limited, Diamond Bank Plc, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Plc, First City Monument Bank (FCMB) Limited, FSDH Merchant Bank Limited, Rand Merchant Bank (RMB) Nigeria Limited, Standard Chartered Bank Plc, Stanbic IBTC Bank Plc, United Bank for Africa (UBA) Plc and Union Bank Of Nigeria Plc.
FBN Quest acted as the facility agent of the loan.
Worthy of note is that MTN Nigeria got a loan facility in 2013 from local and international institutions. The local institutions that participated then include Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank of Nigeria Limited, Access Bank Plc and Fidelity Bank Plc.
According to MTN Nigeria CFO, the telco would wind up the 2013 loan by 2019.
The 5G possibilities
Awobodu hinted at the possibilities of conducting a 5G network test in Nigeria as the South African unit of the group has successfully conducted a network trial on the network.
While it’s a good thing not to be left behind as far as the fifth generation (5G) wireless technology is concerned, MTN Nigeria’s 4G network is not currently available all over the country.
And there’s also the concern about readiness on the part of the devices that the consumers are using.
There’s still no news about the impending initial public offering by MTN Nigeria but Awobodu affirmed that the company would get listed “when the market conditions are right”.
Nigerian startups raised $17.6m in Q1 2019, 8.5% higher than they did in Q1 2018. Find out more in the latest quarterly edition of the Nigerian Startup Funding Report here.