Business News of Wednesday, 13 December 2017
Ecobank Ghana and eight local banks have partnered MTN Telecommunication to sign a GHC 510 million syndicated loan to finance infrastructure expansion in the country.
Mr Dan Sackey, Managing Director of Ecobank Ghana at the ceremony in MTN House said the ceremony is a confirmation of the willingness of the banks to support the business of MTN on the back of its strong operational and financial performance.
He added that it is also to emphasise the strong collaboration between the banks and the telco’s in driving the digital agenda for the country.
“Financial inclusion which involves making financial services available to everyone is the way to go in the pursuit of accelerated economic growth and digitisation is one of the effective and efficient ways by which this financial inclusion can be achieved,” he opined.
According to Mr Sackey, the nine have pooled resources together to ensure that the transaction is successfully completed.
He said “looking forward, as our economy grows; we expect big ticket transactions especially in oil and gas, and other key sectors of the economy. The completion of this transaction confirms the ability of our local banks to work together to support the growth of Ghanaian business which, will inure to the benefit of our customers and the economic growth agenda of the nation as a whole.”
Mr Modupe Kadiri, Acting Chief Executive Officer of MTN said the huge interest in MTN’s business is a clear demonstration of how successful the company’s business has been in Ghana and the excellent financial health they enjoy.
“We are demonstrating our resolve to deepen and strengthen the local banking system by declining offers from foreign banks. We at MTN have absolute confidence in the Ghanaian economy and the people of Ghana,” he said.
He added that the result of the deal is a continuous investment and will further boost their capital expenditure and that enable significant investments into key strategic areas to ensure a robust network in the delivery of a bold new digital world.
He said “that is why we consider this syndicated loan agreement crucial. The funds we are receiving would impact many people. The mobile industry employs about 4,000 people directly and over one million indirectly. MTN alone provides employment for about 700 primary employees and 500,000 more people through our trade channels and other third parties.”
Mr Moyo Kangaing, Managing Director of Ecobank Capital highlighting on the transaction said a total of 10 banks were invited and all committed to the transaction comprised two facilities.
He said in the first facility GHø345 million term loans for a tenor of 5 years with 24 months moratorium for general corporate purposes and to finance capital expenditure while the second facility is GHø165 million revolving credit facilitiesfor a tenor of 5 years for working capital.
Importance of syndicated loan
Mr Kangaing explained that following the initial debt raising transaction of 2012 and its successful repayment, MTN has continued to spur growth and established itself as a market leader in Ghana.
“Its unrivalled track record and strong leadership position paved the way for this utterly successfully debt capital market transaction,” he said.
He added that the transaction generated tremendous interest as it was over-subscribed by over 2.09x despite the macro-economic conditions of the first half of 2017 as a result of continued tightening of monetary policy to curb inflation levels.
The transaction which was oversubscribed is led by Ecobank Ghana, the rest are Barclays Bank, Societe Generale, Stanbic Bank, Fidelity Bank, GCB Bank, Zenith Bank, Standard Chartered Bank and GT Bank
The legal advisors are Bentsi-Enchill, Letsa & Ankomah and AB &David.