MTN Nigeria said on Friday it has signed a 200 billion naira ($653 million) loan with seven local banks, a day after it floated its shares on the Nigerian Stock Exchange
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 on Thursday turning into the second-largest company on the exchange after Dangote Cement.
The Lagos-listed shares gained a further 10% on Friday, its second day of trading. The shares, which listed at 90 naira, closed 10% higher at 99 naira on Thursday.
“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,” Fredi Moolman, MTN Nigeria’s Chief Executive, said.
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.
It listing follows MTN Group’s agreement with Nigerian regulators to settle most of those disputes.
MTN Nigeria on Friday said 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.
It plans to use the funds to finance capital expenditure and working capital, MTN said.