Liquid Telecom seeks R9bn to refinance debt

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Strive Masiyiwa, chairman of Liquid Telecom and founder of Econet Group.
Strive Masiyiwa, chairman of Liquid Telecom and founder of Econet Group.

Liquid Telecom is raising R9 billion ($600 million) to refinance existing debt, as well as support network expansion plans.

Africa’s largest fibre company, with a network running from Cape Town to Cairo, yesterday launched the R9 billion bond to raise the funds.

The company owns and operates over 70 000 fibre-optic route kilometres across 13 central, eastern, southern African regions, five data centres and satellite Earth stations.

For the 12 months ended 30 November 2020, Liquid Telecom's reported revenue and EBITDA was $773 million and $231.1 million, respectively.

The funds from the debt refinancing announced yesterday are intended to support Liquid Telecom as it continues to scale and expand its network capabilities, as well as its digital and technology solutions offerings across Africa.

Furthermore, the new financing package is expected to help deliver long-term benefits to Liquid Telecom’s growing number of enterprise, carrier and retail customers, which currently total over 143 000 across 13 countries of operation.

Liquid Telecom serves businesses through offering services across wholesale data, enterprise, wholesale voice and retail segments, and a new technology solutions segment.

The group is owned by Econet Global, controlled by Zimbabwean billionaire Strive Masiyiwa.

The debt refinancing by Liquid Telecom comes eight months after Bloomberg first reported that the coronavirus pandemic is hampering efforts by Masiyiwa to sell a stake in Africa’s largest fibre firm.

At the time, it was reported that Masiyiwa was seeking buyers for 20% to 34% of Liquid Telecommunications Holdings, for as much as $600 million, as he needed the money to repay a $375 million loan that was backed by the Public Investment Corporation.

The bond issue launched yesterday has since attracted takers, with Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, announcing yesterday it has committed to buy up to $50 million of the bond issue by Liquid Telecom.

EAIF, acting through its agent Ninety One SA, along with the International Finance Corporation and DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH, have committed to place orders to purchase up to an aggregate $178 million in the new note offering.

“Growing Africa’s digital infrastructure is a key foundation stone in recovering the continent from the global economic devastation of COVID-19,” says Sumit Kanodia, investment director at Ninety One.

“EAIF has supported the growth of Africa’s digital and telecommunications sector since 2003. We have given support to projects, including marine and terrestrial fibre-optics, communications towers and satellites that have brought advanced communications to Africa and had significant economic development impact on many countries. Liquid Telecom is a dynamic and successful business we are pleased to support.”

EAIF’s participation in the Liquid bond issue is its fourth large-scale transaction in Africa’s digital and telecommunications sector in the past 12 months.

In 2020, EAIF supported bond issues by Helios Towers and Sonatel, the Senegal-based regional digital and telecommunications business.

The bond issues mobilised c$800 million in private capital invested in high-technology African business.

EAIF also loaned $40 million to the West Indian Ocean Cable Co (WIOCC) as part of WIOCC’s corporate development programme.

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