Telecommunications Company, MTN Nigeria, has secured a N200 billion medium-term loan agreement from a consortium of 12 Nigerian banks.This comes as the firm winds down next year, the repayment of a previously syndicated loan of N329 billion borrowed in 2013 for capital expenditure and working capital, to which it had kept to the servicing agreements.
The loan deal, which was sealed yesterday in Lagos, is to allow MTN expand its services to other parts of the country, especially the underserved and unserved areas.This development is coming three weeks after The Guardian had exclusively reported a 35 per cent dip in rural telephony expansion in Nigeria as a result of drop in investment.
MTN Nigeria Chief Executive Officer, Ferdie Moolman, at the signing agreement, said the signing of the loan was a major landmark in the expansion programme.“This will make it possible for people to connect to each other and the world, find and share information and ideas, create and access new digital services and re-imagine old services,” he said.
Moolman, who stated that MTN clocked 17 years and one week in Nigeria yesterday, said the partnership had secured the future for the telecommunications firm, stressing that the loan will support Capital Expenditure (CAPEX) roll-out, Internet expansion and rural telecoms service expansion.The telecommunications firm said the facility was structured with a two-year moratorium and a repayment plan of five years, and is denominated in Naira.
The MTN Nigeria CEO, who lauded the participating financial institutions for staying committed to the telecommunications firm, stressed that the loan syndication showcased the strength of the Nigerian financial institutions and their confidence in MTN’s vision, as well the joint ability of the parties to stimulate significant economic growth.
However, in his welcome address, Gbenga Oyebode, who represented the Chairman of MTN Board in Nigeria, Pascal Dozie, said the telecommunications firm would not have been where it is today without the support of the banks.“Despite pressures on the banks, they have supported our equipment purchase, network roll-out, and expansion plans. Today’s deal further demonstrates their belief in us,” he stressed.
Also, MTN’s Chief Financial Officer, Kunle Awobodu, said the loan would be expended on the modernisation of the firm’s network and, position it for the data consumption of the future. An Executive Director, Corporate Banking, First Bank Plc., Remi Oni, who spoke on behalf of the bank, said the financial institution was extremely glad to be part of the deal, as the loan committed showed the true value of the MTN brand.
“First Bank is committed to sustaining the business of MTN in Nigeria. As lender, we came to this deal excited that we are doing the right thing,” he stated.His counterpart from Union Bank, Emeka Okonkwo, said the bank had done a lot of background work on MTN, and that partnering with it had impacted Nigeria greatly.“We are happy to be part of this deal because we have a great partner in MTN,” he stated.