South African mobile operator, MTN Group, has reduced its debt further through early settlement of $300 million in eurobonds with a 2024 maturity date as part of efforts to deleverage non-rand debt faster, it said yesterday.
“This brings MTN’s dollar-denominated debt down to 35 per cent of total holding company debt on a H1 2022 pro forma basis,” the company said.
MTN Group Finance Chief, Tsholofelo Molefe, said the settlement would be funded from available cash balances.
In late August, MTN invited eligible holders of the $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 $482 million. This was significantly more than the US$250 million originally intended for early settlement. As a result, MTN raised the final acceptance amount to $300 million, which will be settled today.
“In line with our Ambition 2025 strategy, we are committed to deleveraging the balance sheet faster in line with our capital allocation framework,” MTN Group President/Chief Executive Officer, Ralph Mupita said.
“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.”
MTN Group Chief Financial Officer Tsholofelo Molefe said as the settlement would be funded from available cash balances, it did not affect the Pro-forma Holdco leverage of 0.8x at June 30.
“However, on a pro-forma basis, the settlement improves the end-June 2022 ratio of non-rand to rand debt to 35:65 from the 42:58 ratio reported in the Group’s interim results.”
At end-December 2021, the Holdco leverage was 1.0x. The improvement in the first half of 2022 to 0.8x was boosted by the repatriation of R9.4 billion in cash from our operating companies (including R4.5 billion from MTN Nigeria).
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