MTN Reduces Debt With Early Payment of $300 Million in Euro Bonds

MTN Reduces Debt With Early Payment of $300 Million in Euro Bonds (News Central TV)

Mobile telecommunication operator MTN Group has reduced its debt further through early settlement of $300 million in euro bonds with a 2024 maturity date. The South African-based telco firm said on Monday, it is part of efforts to deleverage non-rand debt.

This brings MTN’s dollar-denominated debt down to 35% of total holding company (Holdco) debt on a H1 2022 proforma basis. MTN encouraged qualified holders of the $750 million Eurobond, which matures in November 2024, to submit their notes for the company to buy for cash by the end of August. Over $482 million worth of bids were submitted in response to the offer. This was a huge increase over the anticipated early settlement budget of $250 million. MTN increased the ultimate acceptance amount as a result, and it will now be resolved on Tuesday, September 6, 2022, for $300 million.

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MTN Reduces Debt With Early Payment of $300 Million in Euro Bonds (News Central TV)

Ralph Mupita, president and chief executive officer of MTN Group, said, “In keeping with our Ambition 2025 plan, we are dedicated to deleveraging the balance sheet faster in line with our capital allocation methodology. This commitment, as well as the implementation and delivery of our medium-term forecast to maintain the Holdco leverage below 1.5x, are supported by this week’s early settlement.

The settlement would be paid for out of available cash balances, according to MTN Group Chief Financial Officer Tsholofelo Molefe, thus it wouldn’t change the pro-forma Holdco leverage of 0.8x by the end of 2022. On a pro-forma basis, the settlement raises the ratio of non-rand debt to rand debt at the end of June 2022 from the 42:58 ratio disclosed in the Group’s intermediate results to 35:65.

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The Holdco leverage was 1.0x at the end of December 2021. The return of R9.4 billion in cash from our operational companies helped the first half of 2022’s improvement to 0.8x (including R4.5 billion from MTN Nigeria).

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