Airtel Approved N50 Billion Loan Contract With Several Commercial Banks

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Airtel Approved N50 Billion Loan Contract With Several Commercial BanksAirtel Approved N50 Billion Loan Contract With Several Commercial Banks

Airtel Nigeria has endorsed a five-year loan approval with some of the Nigerian commercial banks.

The telecommunication organisation, which is ready to list its shares on the Nigerian Stock Exchange by July 4 and its African unit on the London Stock Exchange, revealed this in its offer prospectus.

It added that the loan contract endorsed on June 17, 2019, the banks would permit it to make a repayment in five years and that they offered the company a two-year moratorium.

“Airtel Nigeria entered into a bank facility agreement for an amount of N50bn, which is available for a period of 180 days from the acceptance of the offer and has a tenure of five years inclusive of a twenty-four-month moratorium on the principal amount,” it said.

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While the purpose of the facility was not stated, the Group described the telecom industry as a capital-intensive one that required substantial amounts of capital and other long-term expenditures.

According to Airtel, such expenditures are related to the development and acquisition of new networks and the expansion or improvement of existing networks.

It noted that the group’s capital expenditures were $630m, $411m and $395m in each of the years ended 31 March 2019, 2018 and 2017, respectively.

Airtel added that it had financed the expenditures in the past through a variety of means, including banking facilities, particularly at the operating company level, accessing debt capital markets, and to a lesser extent, through accessing equity capital markets.

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Airtel, which is Nigeria’s third-largest telco, said it intended to use the net proceeds from its Initial Public Offer principally on the reduction of debt of $750 million and achieve a targeted leverage ratio of 2.5x, based on underlying EBITDA for the year ended March 31, 2019.

It highlighted other objectives of the issue of ordinary shares as a way to the establishment of an independent capital structure and governance framework.

The company said the Nigerian offer consisted of an institutional offer only, and as such, shares would be offered to qualified institutional investors and high-net-worth investors in Nigeria, as defined in Rule 321 of the Securities and Exchange Commission Rules by way of book building.

According to Airtel, 501.125 million and 716.406 million shares are on offer to Nigerians.

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It named the issuing houses for the offer as Barclays Securities Nigeria and Quantum Zenith Securities Investments Limited.

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Airtel said the application had been made to the NSE for the ordinary shares to be admitted to the official list of the NSE.

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Airtel Approved N50 Billion Loan Contract With Several Commercial BanksAirtel Approved N50 Billion Loan Contract With Several Commercial Banks

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Airtel Approved N50 Billion Loan Contract With Several Commercial BanksAirtel Approved N50 Billion Loan Contract With Several Commercial Banks

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- Advertisement -Airtel Approved N50 Billion Loan Contract With Several Commercial BanksAirtel Approved N50 Billion Loan Contract With Several Commercial Banks