16 NIGERIAN, FOREIGN BANKS RAISE US$1.1BN FOR V-MOBILE

Mergers, Acquisitions and Financial Results

History was made in Nigeria's financial sector last week as V-Mobile Nigeria announced the completion of a US$1.1 billion medium-term debt financing agreement with leading international banks and a consortium of 16 top Nigerian banks led by Zenith International Bank Plc, Guaranty Trust Bank Plc and First Bank of Nigeria Plc.

Other financiers in the deal include Export Credit Agencies, multilateral institutions and equipment vendors and while the foreign banks raised $650 million, the local banks supported Vmobile with US$450 million. The debt financing will be used to drive Vmobile's aggressive network rollout and support the ongoing coverage expansion programme tagged, Project ROSE, across the country.

Commenting on the deal, Chief Executive Officer of Vmobile, Willem Swart, said the financing is a major feat in the company's rollout plans, and confirms international and local financiers' confidence in the company's operations.He added that the agreement also gives Vmobile access to finance to fund its five-year business plan adding that "In addition, the deal further reaffirms the increasing international confidence in Nigeria as a fast growing investment destination, and boosts foreign direct investment by more than US$650 million".

The financing deal, which is in two phases, is being provided by leading financial institutions in Nigeria, international financial institutions and reputable global GSM equipment vendors.

During Phase 1, the company is to access over US$700 million, with about $250 million provided by offshore banks and equipment vendors while in Phase 2 of the deal, offshore lenders will provide over US$400 million. Already, about $200 million has been drawn down.

Providing a breakdown of the funding agreement, Chief Treasury Officer, Vmobile, Ayo Gbeleyi, said "Vmobile concluded the negotiations and execution of its Global Finance Documents on September 16, 2005.

"Offshore lenders include African Export and Import Bank (Afrex-Im), Standard Chartered Bank, Rand Merchant Bank, Barclays Bank, Nordea Bank AB and Ericsson Credit AB.

"The consortium of 16 leading Nigerian banks/institution includes First Bank, Zenith Bank, GTBank, Afribank, Wema Bank, National Bank, Intercontinental Bank, UBA, Ecobank, Lead Bank, Access Bank and Oceanic International Bank.

"Others are MBC International Bank, First City Monument Bank, EIB International Bank and Kakawa Discount House".

According to him, "Nordea Bank AB and Ericsson Credit AB facilities enjoy political risk insurance coverage from Swedish Export Credits Guarantee Board (EKN) and Multilateral Investment Guarantee Agency (MIGA), respectively. This is in addition to the Security Trust Deed which gives pari-passu interest in the assets of the company to existing and future senior lenders.

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