MTN raises $52m from banks in Rwanda to finance its operations

MTN is looking to raise funds worth $56.52 million (Rwf50 billion) from commercial banks in Rwanda to finance its operations and expand its network. This is not the first time MTN is raising such a huge sum from local lenders. In 2009, it secured a syndicated loan of Rwf10 billion ($11.3 million) from seven local banks to upgrade its network.

The first foreign-based entity of the South African telecommunications company is currently in talks with a consortium of eight unnamed local lenders to secure investment capital to upgrade its infrastructure.

MTN Rwanda’s Chief Executive Officer, Bart Hofker who confirmed the company’s plan stated that “to meet the capital expenditure programme, we have the intention to go out into the local market and raise debt in local currency through a syndicated loan.”

Hofker added that MTN is on a growth trajectory and has embarked on an extensive capital expenditure investment programme to ensure added revenue streams that will transform the telecommunications company.

In 2017, MTN Rwanda recorded a loss of $8.5 million from the Rwanda Utilities Regulatory Authority (RURA). The company was fined for non-compliance, prohibiting the inclusion of MTN Rwanda in the MTN South and East Africa (SEA) IT hub based in Uganda.

Should the fundraising go successfully, the latest borrowing will be the biggest syndicated loan gotten from local lenders. In 2009 MTN Rwanda raised  $11.3 million from a group of local lenders, I&M Bank (former Commercial Bank of Rwanda), Kenya Commercial Bank, Ecobank Rwanda, Cogebanque, FINA Bank, Access Bank and the Development Bank of Rwanda (BRD).