Nigeria: MTN to Float Bond to Pay N330 Billion Fine
MTN Group Limited, yesterday, disclosed plans to raise dollar denominated bond that would help it to pay for dividends, capital expenditure and the N330 billion ($1 billion) fine levy imposed to it by the Nigeria Communication, NCC.
The MTN has mandated Barclays Bank Plc, Bank of America Corp.'s Merrill Lynch, Citigroup Inc. and Standard Bank Group Limited to arrange a series of fixed-income investor meetings in the U.S. and the U.K. starting September 9, 2016.
According to Reuters report, the MTN, which disclosed this in a statement, stated that the dollar-denominated bond offering "is expected to follow subject to market conditions."
MTN's move to attract funding comes after the company reported its first-ever half-year loss this month, partly caused by an agreement to settle the fine with NCC. The subscriber base of 233 million didn't grow during the six months through June, while MTN is struggling to repatriate 15.4 billion rand ($1.1 billion) tied up in its Iran unit. "Pre-dividend free cash flow won't cover payments of dividends and the fine in Nigeria this year and in 2017," Alexandre Dray, an emerging-markets credit analyst at Gimme Credit LLC in Tel Aviv, said in e-mailed comments. "Therefore, the company needs to raise new debt or equity to keep a comfortable liquidity position."