The MTN Group Limited has raised $1.3bn in loans before its planned sale of bonds to offset the N330bn Nigerian fine, pay dividends and address capital expenditure.
The shares of Africa’s largest mobile phone operator by sales climbed for a second day after raising the loan. The shares jumped by 2.2 per cent to 121.49 rand as of 12:29pm in Johannesburg on Wednesday, the biggest two-day advance since June 29 and valuing the company at $16bn, according to Bloomberg.
MTN is being provided with $1bn and 4.8 billion rand from local and international banks and financial institutions, it said in an e-mailed response to questions on Tuesday. MTN is on a roadshow in the United States and the United Kingdom this week to gauge investor appetite for debt securities.
“The fact that MTN managed to secure the loans and attract funds from institutional investors bodes well,” said Sasha Naryshkine, a director at Vestact Limited in Johannesburg, which holds MTN stock, adding, “This might also help MTN to get a good outcome in terms of selling bonds. Investors will look for yields without too much risk, and things are looking much better for MTN. The timing is good for a MTN bond sale.”
MTN’s move to attract funding came after the company this year posted its first-ever half-year loss, partly caused by an agreement to settle a record N330bn fine in Nigeria. The stock has declined by 29 per cent over the past 12 months amid concern over the penalty and a subscriber base of 233 million that didn’t grow in the six months through June. The wireless operator is also struggling to repatriate 15.4 billion rand tied up in its Iranian unit.
MTN and its subsidiaries have $3.2bn of debt and interest payments due by the end of July next year, according to data from Bloomberg. That includes a $2.75bn bridge-term loan, a 2 billion-rand senior unsecured loan and 1.25 billion rand of bonds, the data showed.
