MTN Nigeria oversubscribes for expansion

Leading Nigerian telecommunications provider MTN Nigeria has been awarded US$2bn in oversubscribed new loan facilities.

The majority of the financing, which will be used to support the expansion of the company’s telecom network, is a syndicated facility of N250bn (US$1.6bn) from a consortium of 15 Nigerian banks.

The facility was originally set at around US$860mn, but was oversubscribed by more than 50%.

Furthermore, this is the largest ever Naira-denominated syndication in Nigeria.
 
Making up the remaining financing is a five-year US$250mn export credit facility from KfW-Ipex Bank which is backed by Sweden’s export credit agency, EKN, and a US$200mn buyer’s credit facility from Industrial and Commercial Bank of China, which will both be used in equipment acquisition.

Volker Wiederhold, first vice president of telecommunications and media at KfW-Ipex, tells GTR: “We have a strong a longstanding relationship with the MTN Group and MTN Nigeria. MTN Nigeria is a strong credit with high managerial competence backed by an impressive track record since it launched telecom services in 2001.”

“Furthermore, MTN is a very innovative company committed to sustainable corporate social responsibility,” Wiederhold adds.

The deal was advised by international law firm Freshfields Bruckhaus Deringer.
 
GTR speaks to Marc Fèvre, counsel finance, energy and infrastructure at Freshfields, who comments: “We were delighted to advise MTNN on its landmark transaction. There has been a considerable restructuring in the Nigerian banking industry and lending has dropped significantly. After a difficult year for banks, this transaction has the potential to act as a catalyst for further lending in Nigeria.

“Nigeria is legally a relatively sophisticated market with major infrastructure needs, giving rise to a number of opportunities for domestic and international firms to work together in the next few years. However, market sentiment is that there will be a slowdown in activity as a result of forthcoming elections.”

The following banks were involved in the syndication:

Access Bank
Afribank Nigeria
Diamon Bank
Ecobank Nigeria
First City Monument Bank
Fidelity Bank
First Bank of Nigeria
Guaranty Trust Bank
Stanbic IBTC
Citibank Nigeria
Standard Chartered
Bank PHB
Union Bank of Nigeria
United Bank for Africa
Zenith Bank.