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MTN raises R19bn through loans

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 14 Sept 2016
MTN says there is absolutely no link between the Nigerian fine and the money currently being raised by the group.
MTN says there is absolutely no link between the Nigerian fine and the money currently being raised by the group.

MTN is set to enter into three loan agreements to raise a combination of around R19 billion.

MTN group executive for corporate affairs Chris Maroleng confirmed to ITWeb that MTN "has adopted the required resolutions to authorise it to enter into three loan agreements" in relation to facilities worth R4.8 billion and $1 billion (R14.3 billion).

He says the facilities are made available by "one or more consortiums of local and international banks and financial institutions" to MTN and one or more of its subsidiaries (as borrowers), and are guaranteed by MTN and one or more of its subsidiaries.

"These financing arrangements are in line with MTN's funding strategy which aims to improve its debt maturity structure on an ongoing basis and maintain adequate bank facility headroom to support its credit rating," Maroleng says.

"MTN's funding strategy further aims to maintain a balance of operating currency and USD-denominated debt."

The group, however, denies the fund-raising activities are in any way linked to the 330 billion naira (R15 billion) fine imposed on its Nigerian business by the Nigerian Communications Commission (NCC).

"There is absolutely no link between the MTN Nigerian fine and the money currently being raised by the MTN Group. This persistently inaccurate information does not serve MTN's reputation and market confidence in the company very well. As repeatedly stated before, the MTN Nigerian fine is in naira and will be paid by the Nigerian operation," Maroleng adds.

In June, the South African-headquartered telecoms operator finally reached a settlement with Nigerian authorities, after months of negotiations, and agreed to pay the government N330 billion ($1.671 billion, or R25 billion at the time) for the penalty. The original N1.04 trillion fine (R71 billion at the time) fine was slapped on MTN last October for failing to meet a deadline to disconnect 5.1 million unregistered SIM cards in the West African nation.

The fine did, however, drag down the group's earnings for the six months ended 30 June, as MTN reported a headline loss per share of 271c.

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