MTN Group, Africa’s largest mobile phone operator by sales, said it entered three loan agreements, raising more than US$1,3bn (R18,8bn) as the company markets a potential bond sale.
The company is being provided with $1bn and R4,8bn from local and international banks and financial institutions, Johannesburg-based MTN said in an e-mailed response to questions on Tuesday.
MTN is on a roadshow in the US and UK this week to gauge investor appetite for a bond sale.
“These financing arrangements are in line with the MTN’s funding strategy, which aims to improve its debt maturity structure on an ongoing basis and maintain adequate bank facility headroom to support its credit rating,” the company said. “MTN’s funding strategy further aims to maintain a balance of operating currency and dollar-denominated debt.”
MTN’s move to attract funding comes after the company reported its first-ever half-year loss in August, partly caused by an agreement to settle a record 330bn naira ($1bn) fine in Nigeria.
MTN and its subsidiaries have $3,2bn of debt and interest payments due by the end of July next year, according to data compiled by Bloomberg. That includes a $2,75bn bridge-term loan, a R2bn senior unsecured loan and R1,25bn of bonds, the data shows.
Two loan deals were signed on 25 August, according to data compiled by Bloomberg. A facility for $250m matures in 2019 and a $750m agreement closes in 2021, the data shows.
Its subscriber base of 233m didn’t grow during the six months to June and MTN is struggling to repatriate R15,4bn tied up in its Iran unit.
“The process of repatriating money out of Iran has been more complex than we initially thought, with Iran not having ties with international banks,” MTN’s outgoing chief financial officer Brett Goschen said at the company’s first-half results presentation on 5 August.
“Every week we are getting a little bit closer, but it will take us at least five to six months to get the money out once we start the first tranche.”
MTN hopes to start moving the funds out of Iran during the first half of 2017, according to Goschen. He will leave at the end of the month and a successor has yet to be appointed.
“MTN remains confident of its ability to remit monies in the short to medium term, and is currently on a process of putting in place the appropriate governance structures to facilitate the repatriation of funds,” the company said on Tuesday. — (c) 2016 Bloomberg LP
