MTN slashes millions of dollars off foreign debt

The MTN Group has settled U$300 million worth of Eurobonds that were only due in 2024, helping to deleverage its balance sheet.

The Pan-African operator said that following its strong interim results for 2022 it decided to settle the Eurobonds earlier than planned, bringing the telco's dollar-denominated debt down to 35% of total holding company (Holdco) debt.

In late August, MTN invited eligible holders of the US$750 million Eurobond – due to mature in November 2024 – to tender their notes for purchase by the company for cash.

The offer attracted tenders of more than US$482 million, which was significantly more than the US$250 million originally intended for early settlement. As a result, MTN raised the final acceptance amount to US$300 million, which will be settled on September 6, 2022.

Steady growth

Last month, the telco reported good results for the six months ended June 30, 2022, with group service revenue rising almost 15% to 92.5 billion South African rand (US$5.4 billion). Meanwhile headline earnings per share (HEPS) – considered the main profit measure in South Africa – increased by 46.5% year-on-year, to 567 South African cents (32.8 US cents).

During the period MTN was also able to further deleverage its balance sheet, boosted by the repatriation of R9.4 billion (US$545 million) in cash from its operating companies, including R4.5 billion (US$260 million) from Nigeria.

MTN Group President and CEO, Ralph Mupita, said that the group committed to deleveraging the balance sheet faster in line with its capital allocation framework.

"This week's early settlement supports delivery of this commitment as well as of the execution and delivery of our medium-term guidance to maintain the Holdco leverage below 1.5x," he said.

MTN Group CFO Tsholofelo Molefe added that the settlement would be funded from available cash balances and would not affect the pro-forma Holdco leverage of 0.8x at the end of June 2022.

MTN operates in 19 markets and has 281.6 million subscribers, an increase of 5.6% year-on-year.

*Top image is of Ralph Mupita, MTN Group president and CEO. (Source: MTN Group).

— The Staff, Connecting Africa