Celtel Burkina Faso, MSI Cellular's operator in West Africa, has become the first independent cellular operator in the region to raise money through a public bond, with the issue of a CFA 3 billion (US$5.25 million) bond.
The offer opened to local and international institutional and private investors on 12th August and closed within four days due to oversubscription, despite having been scheduled to last a month.
About half of the funds were raised within Burkina Faso and the other half in the West African sub region (UEMOA).
The term of the bond is six years with capital repayments starting after the first three years. It was issued at an interest rate of 7.15% and is guaranteed by Fonds de Solidarité Africain (FSA).
Celtel Burking Faso Managing Director, Raymond Laforce, said:
"This is a substantial bond issue for the region. Its success demonstrates the confidence that investors have in Celtel Burkina Faso and the quality of our network and operations in Burkina Faso. The funds raised will be used to extend our network coverage and launch new services."
"This introduces Celtel to a pool of long term investors, allowing us to extend the tenor of our financing and match cash flows whilst simultaneously reducing financing costs."
The bond will trade on the regional bond market (BRVM) based in Abidjan within three months of issue. Celtel Burkina Faso is the first private cellular operator in West Africa and only the second private company in Burkina Faso to issue a public bond.
The issue was arranged by Société Burkinabé d'Intermédiation Financiére ("SBIF"). SBIF Managing Director, Alexis Lourgo, commented:
"Celtel has all the right attributes for a public bond issue; a solid financial base, good future prospects and professional management. It took only four days for the issue to become over-subscribed, which is testimony to the high rating which investors attribute to long term credit in Celtel."
Enquiries: MSI Cellular (Simon Poole) Tel: +226 33 1400; College Hill (Corinna Dorward) Tel: +44 20 7457 2020
Editors Notes
Celtel Burkina Faso was launched in January 2001. It currently has over 70,000 subscribers. Celtel Burkina Faso is part of a broader group of Celtel mobile networks in Africa, owned by MSI Cellular.
MSI Cellular has been licensed by twelve Governments in Africa, representing more than one-third of the population of the African continent. MSI has operations in Uganda, Zambia, Malawi, the Republic of Congo ("Congo Brazzaville"), Gabon, Sierra Leone, Chad, Burkina Faso and Democratic Republic of Congo ("Congo Kinshasa"), Sudan and Niger. In Tanzania, MSI has a 35% equity stake and management control of Tanzania Telecommunications Company Limited (TTCL). TTCL launched the Celtel Tanzania cellular network as an independent subsidiary company. In Egypt, MSI is a founding shareholder and minority partner in Vodafone Egypt. Shareholders in MSI include:
- CDC Capital Partners, a leading risk capital investor in emerging markets, with over US$1.5 billion invested in some 50 emerging countries.
- IFC (International Finance Corporation) the private sector arm of the World Bank and the largest source of private equity for developing countries.
- AIG Infrastructure Fund, sponsored by AIG and managed by EMP, the largest private equity infrastructure manager in emerging markets with nearly US$5 billion under management.
- Zephyr Asset Management, the US based emerging market fund.
- Citigroup, the global financial services group.
- Bessemer Venture Partners, the investment arm of one of the oldest funds in the USA.
- Palio, the Swiss technology investment company.
- FMO, the Dutch development institution and DEG, the German development institution.
- Old Mutual Asset Management in South Africa
