MTN Nigeria on Wednesday finalised a N318bn loan deal with 15 Nigerian banks and two foreign banks. The facility, which experts have said is an indication that Nigerian banks are again able to finance big-ticket transactions, is to expand MTNâ€™s network across the country.
According to the Chief Executive Officer, MTN Nigeria, Mr. Ahmad Farroukh, the loan will provide a strong financial base to pursue the companyâ€™s goal and improve its quality of service.
Nigerian banks participating in the loan deal include: Zenith Bank Plc with a commitment of N38bn, Guaranty Trust Bank Plc (N30bn), United Bank for Africa Plc (N25bn), First Bank of Nigeria Plc (N25bn), Fidelity Bank Plc(N25bn), Access Bank Plc(N20bn), Union Bank of Nigeria Plc(N15bn) and First City Monument Bank Plc (N15bn).
Others are Diamond Bank Plc with a share of N10bn, Ecobank Nigeria Plc(N10bn), Standard Chartered Bank(N7bn), Bank PHB Plc(N5bn), Citibank Nigeria (N5bn)and Afribank Plc (N5bn).
The offshore funding, according to Farroukh, consists of a $250m export credit facility from KfW IPEX-Bank of Germany, which benefits from the Swedish Export Credit Agencyâ€˜s cover on the back of Ericssonâ€™s equipment purchases.
â€œThis is the first time MTN Nigeria has leveraged its purchases from Ericsson to secure export credit backed funding,â€ he said.
The other deal, according to him, is a $200m Buyerâ€˜s Credit Facility from Industrial and Commercial Bank of China to purchase equipment from Huawei.
He said this was also the first time that any member of the MTN Group would secure funding from ICBC.
In his remarks at the formal signing of the loan agreements in Lagos on Wednesday, Farroukh said, â€œThese facilities provide us with a strong financial basis to pursue our goal of extending service to more Nigerians who are yet to experience the telecoms revolution, while also improving the quality of service on the network.
â€œThe loans demonstrate immense confidence by these global financial players in the managerial competence of MTN and its commitment to its mission of providing peerless telecoms services across Nigeria. The loans will go a long way in fast-tracking our network enhancement efforts.â€
Described as the largest ever naira-denominated syndication in Nigeria, the naira tranche of the facilities has a tenor of five years.
This huge financing follows a $2bn facility raised in 2007, which won African Telecoms Deal of the Year by Euromoney. At the time, it was the largest facility granted to a single countryâ€™s telecommunications operator in Africa. MTN Nigeria also won this award for its maiden financing in 2003.
MTN Nigeriaâ€˜s heavy investment in infrastructure to enhance the quality and capacity of its network in 2008 and 2009 helped boost its subscriber base. As at March 31, 2010, MTN Nigeria had over 33 million subscribers.