A day after it listed its shares on the Nigerian Stock Exchange, MTN Nigeria announced that it signed a 200 billion naira loan with seven local banks.
The seven-year loan deal coordinated by Citibank, was signed with a consortium of Access Bank, Guaranty Trust Bank, Zenith Bank, Fidelity Bank, FCMB, United Bank for Africa and First Bank.
MTN Nigeria, majority owned by South Africa’s MTN Group, floated its shares in a $6.5 billion listing, a feat which made it the second-largest company on the exchange after Dangote Cement.
The Lagos-listed shares gained a further 10 percent on Friday, its second day of trading. The shares, which listed at 90 naira, closed 10 percent higher at 99 naira on Thursday.
MTN Nigeria’s Chief Executive Officer, Fredi Moolman said “am delighted that, so soon after our successful listing on the Nigerian Stock Exchange, we are able to complement it with such an important addition to our portfolio of debt”.
The MTN unit has 52.3 million users in Nigeria in 2017 and accounts for a third of the Johannesburg-based parent’s profit. However, it has had fraught relations with the Nigerian authorities, including rows over SIM cards and tax payments. The listing follows MTN Group’s agreement with Nigerian regulators to settle most of those disputes.
MTN Nigeria revealed that the new debt is part of a programme to raise debt in Nigeria, aimed at mitigating exchange rate volatility. The telecoms firm said it raised a loan of 200 billion naira in 2018.
The funds will be used to finance capital expenditure and working capital.