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Liquid Telecom raises $700m in bond and term-loan issue

08/07/2017 00:00:00
by Financial Times
Significant achievement ... Nic Rudnick

LIQUID Telecom, an unlisted pan-African telecoms group, has raised $700m in a bond and term-loan issue that will help it refinance debt and provide a war chest for further acquisitions.

The company operates in 13 African countries including South Africa, its biggest market, supplying fibre optic and satellite services for customers such as MTN, Bharti Airtel and Vodafone.

The $550m 5-year bond was priced at 8.5 per cent, though investors had pushed for a higher yield amid a sharp weakening of emerging bond markets on Thursday, when the issue was priced.

“We were comfortable with the support we had despite the fact markets were softening very considerably,” said Nic Rudnick, the London-based chief executive of the company, which could seek an initial public offering as early as next year, according to people familiar with the company’s plans.

Liquid Telecom is 51 per cent owned by Strive Masiyiwa’s Econet Global, an international company that has mobile, fibre optic and content operations in several countries.

Masiyiwa, a Zimbabwean entrepreneur, is understood to be keen to expand the Liquid Telecom business into west Africa beyond its base in southern, central and east Africa.

Among other countries, Liquid Telecom operates in Kenya, Uganda, Tanzania, Rwanda, Mauritius and Zimbabwe.

The money raised in the issue would refinance practically all the debt incurred in Liquid Telecom’s $430m acquisition last year of South African fixed-line operator Neotel from Tata Communications, according to the company.

Although some investors lost their nerve on Thursday as emerging market bonds fell sharply, bankers said that many who stuck with the issue were first-time investors in high-yield African bonds.

“This is a significant achievement for an African tech company,” Rudnick said.

Miguel Azevedo, head of investment banking for Africa at Citigroup, a joint book-runner on the deal, said: “Liquid Telecom’s growth story generated an enormous amount of interest with investors from Asia, America, Africa and Europe.

“Only that allowed us to price the deal inside the price range on a day where the bond markets nearly collapsed, especially for African issuers.”

The other two book-runners were Standard Bank and Standard Chartered Bank.


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