MTN Secures $3Bn Facility to Upgrade Network

MTN Nigeria, with the largest subscriber base in the country has secured a $3 billion (about N470 billion) loan facility from a consortium of local and international financial institutions to upgrade its network.

MTN Nigeria hopes to utilize the 7-year loan facility to expand, modernise and improve its network infrastructure.

According to MTN, the loan consists $1.8 billion in additional facilities and $ 1.2 billion in restructuring of existing local facility.

The consortium of banks includes Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank of Nigeria Limited, Access Bank Plc and Fidelity Bank Plc. All of whom contributed N55 billion ($345 million), N40 billion ($252 million), N40 billion ($252 million), N35 billion ($220 million) and N26.25 billion ($165 million) respectively.

Other lenders include: South Africa’s Nedbank and FirstRand, German state bank KfW, Citigroup, Standard Chartered Plc, Industrial and Commercial Bank of China, China Development Bank and China Construction Bank.

Brett Goschen, chief executive officer, MTN Nigeria, described signing of the loan deal as another strategic collaboration between the telecoms service provider and financial institutions to deepen telecommunications services in Nigeria.

The MTN boss applauded the participating financial institutions for passing a vote of confidence on the telecom company and signifies the strength of Nigerian financial institutions and their ability to stimulate significant economic growth in the nation.

Goschen added that MTN planned to invest over $1.5 billion in 2013, having invested $1.6 billion last year, adding that enhanced network quality is the group’s key focus.

“Enhancing our network quality is a key focus of the investment as we lead the delivery of a bold new digital world for our customers,” he said.

Goshen also explained that the deal is the sixth of such strategic partnerships with other notable ones including the $170 million commercial paper facility secured by the company in 2002, and a $395 million medium-term facility in 2003.

He stated that 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 $2bn 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.

Another of such deal was sealed in 2010 when MTN Nigeria partnered with 15 local financial institutions and two international lenders to raise another $2 billion, which was described as the largest corporate financing deal in the whole of sub-Saharan Africa.

“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,” Goshen said