MTN Ghana has secured a GH¢510 million syndicated loan to help expand its network and also increase coverage to rural communities.
The five-year medium-term facility, arranged by Ecobank from nine local banks, including Standard Chartered Bank, Barclays Bank and Stanbic bank, comes at a rate of 182 day Treasury Bill rate plus five per cent.
An agreement to that effect was signed between MTN Ghana and the nine local banks in Accra on Thursday.
“The result of this deal is a continuous investment and will further boost our capital expenditure and enable significant investments into key strategic areas to ensure a robust network in the delivery of a bold new digital world,” Mr Modupe Kadri, Chief Financial Officer, MTN Ghana, said at the signing.
Mr Kadri said the increasing customer sophistication required that huge capital investments had to be made to be able to meet the demands of the market, and keep up with trends in technology in order to provide relevant products and services.
He said the loan, which was oversubscribed by 590 million cedis, was a clear demonstration of MTN’s excellent financial health and the resolve to deepen and strengthen the local banking system by declining offers from foreign banks.
Mr Dan Sackey, Managing Director of Ecobank Ghana, said the signing of the facility was the confirmation of the willingness of the banks to support the business of MTN on the back of its strong operational and financial performance.
Besides, it also emphasised the strong collaboration between the banks and the telecommunication companies in driving the country’s digital agenda.
“To remain relevant to our clients, we must continue to evolve just as MTN is doing. We also believe that this is the underlying reason why MTN is raising this facility to improve its infrastructure,” Mr Sackey said.
Mr Sackey said the event was also a testimony to the level of collaboration between banks in Ghana, adding that together, the banks are in a better position to provide the financial needs of their customers.
“I believe that such collaborative efforts will continue, not just for this transaction but for other transactions that are required by players in other industries of the economy,” he said.
“Looking forward, as the economy of Ghana grows, we expect to see big tickets transactions; oil and gas is one area which naturally comes to mind. There are also other key sectors of the economy where heavy capital expenditure and working capital is required and as we do that we support not just the growth of individual banks but also the economic growth and developmental agenda of the nation as a whole,” he added.
Mr Moyo Kamgaing, Group Head, Investment Banking, said the deal showed Ecobank’s capabilities in the corporate and investment banking space in Ghana and Middle Africa.
“With the closure of this transaction, Ecobank is poised to continue on the path of leading big ticket deals in Ghana and across its coverage space,” concluded Moyo Kamgaing.
MTN Ghana in 2012 raised $300 million from a similar loan to finance network expansion, but this was repaid by the end of May this year.
MTN is the leading mobile operator in Ghana with 17.8 million voice subscribers as of September.