MTN Uganda Secures UGX 370 Billion in a Landmark Local Currency Syndicated Facility

By John Kusolo

In a milestone achievement for Uganda's telecommunications industry, MTN Uganda Limited (MTN-U) has successfully secured UGX 370 billion (USD 100 million) in committed debt financing from a consortium of five local banks. This marks one of the largest local currency syndicated facilities ever undertaken in the country.

As the leading telecommunications provider in Uganda, MTN-U boasts a subscriber base of approximately 21.6 million as of September 2024. The company is majority-owned by the MTN Group, Africa's largest telecommunications network, serving over 280 million customers across 17 markets.

This financing underscores MTN-U's robust operational model and long-term potential, focusing on expanding its digital and financial services offerings. The funds will be utilized for general corporate purposes, including upgrading and expanding the company’s network infrastructure to further enhance service delivery.

The syndicated debt facility was 1.6 times oversubscribed, reflecting strong confidence from local lenders in MTN-U's growth trajectory and financial stability. The company continues to maintain a strong balance sheet with leverage well below the industry’s average of 1.5x, further cementing its position as a reliable borrower within Uganda’s financial sector.

The arrangement was spearheaded by Stanbic Bank Uganda Limited, a member of the Standard Bank Group, which acted as the Global Coordinator, Mandated Lead Arranger (MLA), and Bookrunner. Supporting Stanbic Bank in this monumental deal were Absa Bank Uganda Limited, Citibank Uganda Limited, Standard Chartered Bank Uganda Limited (as Co-MLAs), and Centenary Rural Development Bank as the Arranger.

Mr. Paul Mugangwa, Head of Corporate and Investment Banking (CIB) at Stanbic Bank Uganda, expressed pride in collaborating with MTN-U and other relationship banks to deliver an innovative financing package. “MTN-U is at the forefront of adopting innovative financing solutions at scale,” he remarked, highlighting the transformative impact of this transaction.

Mr. Andrew Bugembe, MTN-U’s Chief Financial Officer, noted that securing this significant funding reflects the company’s competitive strength and growing appeal for premium corporate debt instruments within Uganda’s financial sector. The facility aligns with MTN-U’s commitment to operating efficiently and responsibly while pursuing its ambitious growth plans.

“This financing ensures that MTN-U continues delivering on its commitment to advancing digital and financial inclusion across Uganda, enabling the company to meet the demands of its expanding customer base,” Bugembe emphasized.

With this landmark financing in place, MTN-U is well-positioned to drive its strategic objectives of network expansion and innovation in financial technology. The company’s focus on bridging the digital divide aligns with Uganda's broader agenda of fostering financial inclusion and technological advancement.

This transaction sets a precedent for local currency debt financing in Uganda, showcasing the strength of the country's banking sector and its capacity to support large-scale corporate ventures. The collaboration between MTN-U and the participating banks highlights the importance of innovative financial solutions in driving economic growth and development.

In conclusion, MTN-U’s successful syndication not only strengthens its operational capabilities but also reflects the growing maturity of Uganda’s financial sector. By leveraging such facilities, MTN-U continues to position itself as a catalyst for digital transformation and financial empowerment in Uganda.