MTN Nigeria Receives N318 Billion Loan from 17 Banks

Mergers, Acquisitions and Financial Results

MTN Nigeria got a boost last week when it received fresh loan facilities from a consortium of banks to enable the company further expand its network across the country.

The medium term loan which is expected to take a five year repayment period was formally signed yesterday in Lagos by the MTN board of directors and chief Executives of the 15 lending banks including two foreign banks.

MTN Chief Executive Officer, Ahmad Farroukh, described the development as "another historical milestone in the development of telecommunications in Nigeria."

The banks in the loan deal which is naira dominated include; Access Bank, Afribank, Bank PHB, Citibank Nigeria Limited, Diamond Bank, Ecobank Nigeria, First City Monument Bank Plc, Fidelity Bank and First Bank of Nigeria. Others are Guaranty Trust Bank, Stanbic IBTC Bank, Standard Chartered Bank Nigeria Limited, Union Bank of Nigeria, United Bank of Africa and Zenith Bank.

The 15 banks' loan facility amounts to N250 billion while the rest is lend by the two foreign banks. The dollar denominated part of the funding consists of two separate facilities: a $250m export credit facility from KfW IPEX-Bank of Germany, and a $200m Buyer's Credit facility from Industrial and Commercial Bank of China (ICBC) to purchase equipment from Huawei.

The sheer magnitude of these funds five times the budget of Yobe State and nine times the 2010 budget of The Gambia- signifies the confidence local and international investors have come to repose in Nigeria, he said.

He said as at 31 March 2010, MTN Nigeria had recorded over 33 million subscribers. MTN arranged the facilities itself and it was done within six months, Daily Trust learnt. In 2007, MTN had borrowed a whopping $2bn facility which won African Telecoms Deal of the Year by Euromoney. At the time, it was the largest facility granted to a single country telecommunications operator in Africa.