Mergers, Acquisitions and Financial Results

United Bank for Africa (UBA), Zenith International Bank Plc, Guaranty Trust Bank (GTB) and three other banks last week signed agreement M-tel for the provision of N5 billion (USD3.8m) bridge facility for network expansion and system upgrade. Other banks in the loan syndication arrangement include Union Bank of Nigeria Plc, Prudent Bank Plc and Standard Trust Bank Plc.

The agreement signed between representatives of the banks and M-tel for N5 billion is the first tranche of a N15 billion syndicated note issuance facility being arranged for the GSM company upon fulfillment of certain conditions in a medium term financing plan.

Managing Director of M-tel, Aad Loois, in a speech before the signing ceremony disclosed that the loan facility will be used for settlement of on-shore commitments required under existing equipment vendor contracts with Ericsson of Swenden, Motorolla of USA and ZTE of China on the 1.2 million network expansion contract. In addition, the company has earmarked some funds from the facility for new lines planned for next year.

"Some people have been asking why do we need the money? We need the money for completion of our network. During the roll out, transmission infrastructure was not adequate to facilitate widespread distribution of our services," he said adding that there were not enough base stations for communities to access the service.

He disclosed that about 100 cell sites already built cannot be utilised because in the initial contract for network expansion, the transmission backbone was not included. This, he regretted, had restricted coverage of the network in some areas with the North West the most affected.

Loois, however, assured that within two weeks these difficulties would be a thing of the past as the transmission backbone would link Kaduna to Kebbi and Sokoto States.

Loois disclosed that M-tel has recorded a subscriber base of 600,000 since December when the network had only 90,000 active lines, adding that the 1.2 million expansion work was over 80 per cent completed with coverage of 30 states of the Federation.

Managing Director of UBA, Alhaji Aliyu Dikko, said the bank had a strong belief in deregulation policy of the Federal Government especially in the telecommunications industry and the determination to run a private sector led-economy.

Dikko said the loan agreement marked a milestone in the relationship between M-tel and the banks, saying UBA was happy to be associated with the initiative as the leader in the financing arrangement.

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