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Business News of Wednesday, 14 September 2022


MTN Nigeria to launch new N200b bond

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MTN Nigeria Communications (MTN Nigeria) Plc has concluded arrangements to launch its new N200 bond issue as professional parties to the telecoms group intensify engagements with key stakeholders for the success of the offer.

Sources said the bond issue may open within the next few weeks. Stockbroking firms have started extensive marketing of the impending offer, using conclusive details that suggest finalisation of the offer structure.

Available documents indicated that MTN Nigeria plans to issue two tranches of bonds- a tranche of four-year bond maturing in 2026 and another tranche of 10-year bond maturing in 2032.

The forthcoming bond issue has also been rated AAA by Global Credit Rating (GCR) and Aa+ by Agusto & Co. Limited, the same ratings assigned to MTN Nigeria; underlining its strong financial position.

The new capital raising would be undertaken through the book-building method, an auction-like, bid-based process that usually targets investment firms and high networth investors.

MTN Nigeria will use the net proceeds of the new bond issue to support its capital expenditure, working capital and other general corporate purposes.

Under the arrangements, MTN Nigeria will offer a tranche of four-year bonds and another tranche of 10-year bonds; all as fixed rate senior unsecured bonds under its new N200 billion bond issuance programme.

Market analysts said they expected the offer to be fully subscribed citing MTN Nigeria’s industry position and rating.

MTN Nigeria has been active in the domestic capital market this year; leveraging its strong market position to access funds. It had in May, this year raised N127 billion new debt capital, placing it in better position to diversify its capital funding.

MTN Nigeria had in May 2022 issued two commercial papers worth N127 billion. The two issuances were under its N150 billion commercial paper (CP) issuance programme. The net proceeds of the CPs were used by MTN Nigeria to support its short-term working capital and funding requirements.

MTN Nigeria is one of Africa’s largest providers of communications services and Nigeria’s premier provider of connectivity, communication and collaboration solutions. MTN Nigeria is a member of MTN Group – a multinational telecommunications group, which operates in 21 countries in Africa and the Middle East. The company serves over 77 million subscribers with national coverage and a fibre network that reaches every state in the nation.

Latest audited report of MTN Nigeria showed mobile subscribers of 68.5 million, with active data users of 34.3 million and active fintech subscribers of 9.4 million.

Key extracts of the audited report and accounts of MTN Nigeria for the year ended December 31, 2021 showed that gross revenue increased by 23.3 per cent to N1.7 trillion. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 27.9 per cent to N877.1 billion with EBITDA margin increasing by 2.1 percentage points to 53.0 per cent. Profit after tax rose by 45.5 per cent to N298.7 billion, implying earnings per share of N14.67.

Half-year results for 2022 showed profit after tax of N181.63 billion; representing 28.06 per cent growth in net profit. Total assets stood at N2.53 trillion; an increase of 16.44 per cent. Recent reports estimated that MTN Nigeria has 74.1 million mobile subscribers and 36.8 million active data users.

Market analysts said MTN Nigeria was well positioned for long-term sustainable growth due to its infrastructure investments; including the impending deployment of 5G technology due to commence this quarter. It already has 90.01 per cent 2G population coverage, 82.63 per cent 3G population coverage, and 70.75 per cent 4G population coverage.