Econet Wireless group this week clinched a $362 million loan facility for its African operations.
Seventy percent of the money would be channelled to the mobile operator’s Zimbabwean subsidiary, which has been failing to access funding for a long time.
The deal was signed by the company’s founder Strive Masiyiwa in London.
The funds were channelled from development and financial institutions from Germany, France, China, Netherlands, Industrial Development Corporation of South Africa and Sweden.
A source close to the deal yesterday said Econet’s Zimbabwe operations had been struggling to attract funding from international financiers.
“Other countries in the group were able to get the finance,” the source said.
“So with this money we will be able to replace short-term finance in Econet Wireless Zimbabwe with long-term finance from the loan facility, which is cheaper.”
A total of $307 million will go towards Econet Wireless Zimbabwe.
In a statement, Douglas Mboweni, chief executive officer of the Zimbabwe business, said $255 million would be used to refinance existing short-term facilities.
Another $52 million would finance equipment purchases for further expansion.
Mboweni said the tenor of the facilities was an average of five years and the blended rate was Libor-plus 5,3%.
Libor-plus is a wholesale borrowing rate.
Mboweni noted that borrowing for Econet’s expansion projects remained possible only through its parent company.
For the full-year ending February 2012, Econet Wireless posted a 20% increase in full-year earnings due to $184 million investment in the telecommunications company.
The company has so far invested $614 million over the past three years in network expansion.
Econet Wireless revenue went up to $611 million for the full-year from $493 million the previous year, while subscribers increased by 16% to 6,4 million.
Profit after tax for the group was $165,7 million from $141 million in 2011.