The majority shareholders of the telecom company have finally agreed on Smile Telecoms new financing plan. Smile Telecoms Holdings, the parent company of Smile Uganda has experienced a series of internal disputes from investors which saw the company facing potential liquidation if no agreement had been reached. As such, Uganda Communications Commission (UCC) has kept a close eye on the company’s subsidiary, Smile Uganda to ensure that customers’ interests are protected in the event of continuing disagreement.
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Investors finally agree on Smile Telecoms new financing plan
Two of the company’s major investors Al Nahla Group and South Africa’s Public Investment Corporation engaged in talks to embark on Smile Telecoms new financing plan that would save the company from defaulting on loans worth $250 million.
Bloomberg reported that if the two investors failed to reach a deal, the company could be forced into liquidation and lenders including a group of African banks could suffer losses on the bulk of about $250 million senior loans.
As part of Smile Telecoms new financing plan in a final effort to save the company, Al Nahla proposed a cash injection of $51 million on condition that the Public Investment Corporation grants additional terms to a put option for the sale of its stake to the other shareholders at $45 million. The payment was due on 24 March; unless there was an agreement, the restructuring could be unsuccessful.
In recent reports, the two majority shareholders appear to have reached an agreement on Smile Telecoms new refinancing plan that will see Saudi investors, Al Nahla Group, inject $51 million of fresh capital into the company. Furthermore, the operator’s debt repayment deadline has been pushed back to the end of March 2022.
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In a statement emailed to Daily Monitor, Ms Nicolene van Zyl, the Smile Telecoms Holdings group head of corporate communications and marketing, said “The fresh injection of $51m in funding for operations will further enhance Smile’s position in its respective markets and energise Smile’s operations and support efforts towards achieving better performance.”
Smile Telecoms funding has been raised through equity and debt. Bloomberg reported last week that in 2015 Smile had raised $365m in capital, of which $50m was equity funding from Public Investment Corporation, while $315m was a multi-tranche facility sourced from African Export-Import Bank, Development Bank of Southern Africa, Diamond Bank PLC, Ecobank Nigeria, Industrial Development Corporation and Standard Chartered Bank.
Smile Telecoms Holdings Ltd is a Pan-African telecommunications group founded in 2007 with its head office in England and operations in Nigeria, Tanzania, Uganda, the Democratic Republic of the Congo, and South Africa. It is registered in Mauritius and the group offers mobile and broadband services.
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