MTN Ghana raises GHc410m on local market for expansion
5/18/2012 5:35:02 PM -
Sixteen local banks have raised a $300 million (GH¢410 million) medium-term loan for MTN Ghana to expand its operations and improve on its network.
An additional $60 million funding was taken up by foreign banks which participated in the syndication deal
Stanbic Bank Ghana and Standard Bank South Africa, both members of the Standard Bank Group, successfully led the syndication of the facility, regarded as the largest local currency deal in Ghana’s history.
The Managing Director of Stanbic Bank Ghana, Mr Alhassan Andani, said MTN Ghana wanted a bank with a proven international and African footprint to facilitate and participate in the transaction, since a local currency syndication of that magnitude was unprecedented in the economy.
“Standard Bank, through its African and international network, was able to demonstrate its ability to raise funding from multiple sources in both local and foreign currencies,” he said.
Stanbic Bank Ghana and Standard Bank of South Africa were the global coordinators for the deal and they ran the entire syndication process to secure the funding.
Stanbic Bank also participated in the transaction and Standard Bank of South Africa is the facility and security agent.
Some financial analysts told the Daily Graphic after the signing ceremony on Wednesday that such local currency transactions were key to bringing down the pressure on the local currency against the dollar.
“These are the things the Bank of Ghana should be encouraging. The more such local currency transactions we have, the more confidence investors will have in the economy and the currency and pressure will not be on the cedi,” a seasoned banker, who pleaded anonymity, stated.
His view is similar to that of Mr Andani, who said the market was fast growing and such an evolution would be helpful to all players in the economy.
The Chief Executive Officer (CEO) of MTN Ghana, Mr Michael Ikpoki, said the overwhelming response from the local banks showed that the company had good partners, adding, “This kind of investment also shows we are committed to the development of the market in Ghana.”
“By looking within to raise this amount of money, we are indicating to the people of Ghana that we have absolute confidence in the economy and, more important, the Ghana cedi,” the MTN CEO added.
He said the financing would also help the leading mobile telecom operator take its business to the next level where consumers would be the ultimate winner.
“This biggest syndication in the country’s history is also significant, as the banks also give commitment to the future of this market. For all these 16 banks to come together is a sign of maturity,” he said.
Stanbic Bank Ghana, acting as the sole book runner and global coordinator, ran the process to raise the local portion amounting to GH¢410 million, which was oversubscribed by 35 per cent.
The dollar facility was oversubscribed by 92 per cent.
The Director of Stanbic Bank’s Corporate and Investment Banking Unit, Mr Kwamina Asomaning, said, “As a leading emerging markets’ bank and currently Ghana’s best investment bank, we are serious about playing a transformative role in Ghana’s corporate sector, in partnership with the government, organisations such as MTN and like-minded institutions across all sectors.”
Mandated lead arrangers for the syndication were Stanbic Bank Ghana, Ghana Commercial Bank, Ecobank Ghana and Ecobank Capital, Standard Chartered Bank Ghana and Barclays Bank of Ghana.
Mandated lead arrangers in the dollar facility were FirstRand Bank, acting through its Rand Merchant Bank Division, and Export Development Canada.
Arrangers in the Ghana cedi facility included Access Bank (Ghana), SG-SSB Bank, Guaranty Trust Bank (Ghana), Cal Bank, Zenith Bank (Ghana), United Bank for Africa (Ghana) and the Agricultural Development Bank.
The rest are HFC Bank (Ghana), Fidelity Bank and the International Commercial Bank.
The arrangers in the dollar component were the Ghana International Bank Plc and Nedbank Limited, acting through its Corporate Banking Division.
Merchant Bank Ghana Limited was the manager of the Ghana cedi facility.