MTN Uganda last week announced the successful closure of a $114m syndicated credit facility which will be used towards the development of telecommunication infrastructure in the country. This is the second substantial credit facility of this nature that MTN Uganda has secured in the past seven years.
Stanbic Bank Uganda acted as Global Co-ordinator, arranging the syndication between themselves and three other international banks with significant local presence; Citi Bank, Standard Chartered Bank and Barclays Bank. The credit facility consisted of a dual-currency Medium Term Loan and Revolving Credit Facility, raised in both local currency (Uganda shilling equivalent of USD74m) and foreign currency (USD40m).
Due to extensive appetite from the commercial banks participating, the syndication was oversubscribed by 1.2 times and financial closure was attained only 3 months after launching, in spite of lacklustre market conditions and limited Uganda shilling liquidity. Announcing the transaction in Kampala, MTN Uganda Chief Executive, Brian Gouldie, said the facility, was, “a measure of the MTN Group’s commitment to Uganda.”
“By end of last year, MTN Uganda had repaid all the loans arranged under the 2009 syndication, and we were completely debt free. This placed us in an ideal position to fund our continued aggressive network roll-out of high speed data capacity across Uganda. Subscribers have noticed intensive competition in the industry and are demanding for both quality voice and data products,” Gouldie said.
MTN Uganda has also invested in acquiring a permanent home by purchasing the former BAT offices on Jinja Road as the new headquarters. The company’s capital investment for 2016 is planned at UGX 283.3 billion. In 2017 the company plans to invest USD79.9 million UGX 299 billion.
According to Gouldie, the credit facility is an indication of the confidence that banks have in MTN Uganda and also reflects the confidence that the financial sector has in the Ugandan economy and the prospects of the Ugandan telecommunication sector.
Patrick Mweheire, Stanbic Bank’s Chief Executive said, “The successful and expeditious execution of a five year, multi-currency, USD114m syndicated credit facility is a testament to the market’s confidence in MTN Uganda’s plans to improve the country’s telecommunications industry.”
“Stanbic Bank is delighted to have played a lead role in arranging this facility. We believe this has proven that Ugandan banks have the capacity to co-ordinate and deliver debt solutions that enable large corporates to realize their ambitions,” he added.