" ITREALMS: MTN closes N318bn syndication deal with 17 banks

Wednesday, June 09, 2010

MTN closes N318bn syndication deal with 17 banks

The largest Global System for Mobile communications (GSM) operator in the country, MTN Nigeria, has obtained a medium term funding worth N318 billion from 15 local financial institutions and two foreign members of the consortium.

Announcing this in Lagos at a press conference, Wednesday, at the signing ceremony with the consortium, the chief executive officer, MTN Nigeria, Mr. Ahmad Farroukh, accompanied by his chairman, Dr. Pascal Dozie alongside the CEOs of the partnering banks, said that the fund would be used to expand network infrastructure so as to improve quality of services in the country.

Describing the facility as another historical milestone in the development of telecommunications in Nigeria, Mr. Farroukh, noted that in 2007, MTN got $2 billion facility, and stressed that the current facility of N318 billion is a medium term funding spread across five years.

Some members of the latest fund syndication includes Access Bank Plc, Afribank Nigeria Plc, Bank PHB Plc, Citibank Nigeria Limited, Diamond Bank Plc, Ecobank Nigeria Plc, First City Monument Bank Plc, Fidelity Bank Plc, First Bank of Nigeria Plc, and Guaranty Trust Bank Plc.

Others are Stanbic IBTC Bank Plc, Standard Chartered Bank Nigeria Limited, Union Bank of Nigeria Plc, United Bank of Africa Plc, and Zenith Bank Plc.

He also explained that the dollar denominated part of the funding consists of two
facilities from KfW IPEX-Bank of Germany and Industrial and Commercial Bank of China worth US$250 million export credit and $200 million buyer’s credit facility respectively.

According to him, a US$250m export credit facility from KfW IPEX-Bank of Germany, is benefiting from the Swedish Export Credit Agency (EKN), which covers the Ericsson’s equipment purchases for MTN.

“This is the first time MTN Nigeria has leveraged its purchases from Ericsson to secure export credit backed funding,” he said, adding that the US$200m Buyer’s Credit facility from Industrial and Commercial Bank of China is for purchasing of equipment from Huawei.

“The first time that any member of the MTN Group has secured funding from ICBC,” he asserted.

Farroukh also revealed that with the investment of over N700 billion in fixed assets and facilities nationwide, MTN Nigeria has the most expansive network coverage, spread across the 36 states of the federation and the capital, Abuja.

These facilities, he pointed out, would provide the telecom operator the strong financial base to pursue its goal of extending services to more Nigerians who are yet to experience the telecom revolution.

“The loans demonstrate immense confidence by these global financial players in the managerial competence of MTN and its commitment to its mission of providing peerless telecom services across Nigeria,” he said, emphasizing that the loan would go a long way in fast-tracking the network’s enhancement efforts in the country.

In his comments, Chief Financial Officer, MTN Nigeria, Mr. Andrew Bill, disclosed that the facilities took about six months to put together, insisting that it is in conformity with the directives of the Central Bank of Nigeria (CBN).

For the chairman, MTN Nigeria, Dr. Pascal Dozie, they are grateful to the financial institutions both locally and foreign based for the partnership trust they have on MTN for this fund, noting that MTN has almost touched every part of the Nigeria’s population and with this development, more impact is expected.

“The communications industry has tried to bring Nigerians closer to the world,” he said, adding that MTN through its foundation has been touching lives and expressed the hope that the effect of its MTN Foundation would be more pronounced.

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