Shareholders of Smile Telecoms Holdings have agreed to a refinancing plan that will see majority owner Al Nahla Group commit $ 51 million in new capital.
The South African telecommunications company, present in Uganda, Tanzania, DR Congo and Nigeria, had been threatened by a disagreement between two majority shareholders – the Saudi group Al Nahla and the South African public investment company – after that they failed to agree on a put option, thus exposing the company to liquidation.
The failure of the put option deal, which gives the majority shareholder the right to sell a specified amount of an underlying security, last week forced the Uganda Communications Commission to put on watch the operations of Smile Uganda in order to protect stakeholders and customers in the event of any eventuality.
However, in an emailed statement to Daily Monitor, Ms Nicolene van Zyl, head of corporate communications and marketing at Smile Telecoms Holdings, said the restructuring plan, which was announced in January, had been approved and agreed with the lenders.
“The new injection of $ 51 million in operations funding will further strengthen Smile’s position in its respective markets, boost Smile’s operations and support efforts to achieve better performance,” she said, noting that debt repayment would be rescheduled until after March 2022.
However, the statement did not indicate whether the two shareholders had agreed to Al Nahla’s request for Public Investment Corporation to agree on the option to sell its stake to other shareholders for. $ 45 million.
The contested proposal was made as a condition for Al Nahla to inject the $ 51 million even though Public Investment Corporation said that while it supported the restructuring plan, it was still committing the Smile shareholders to find ways to preserve value for its customers.
The dispute had threatened nearly $ 250 million in loans due to Smile Telecoms being held by both equity and commercial bank loans.
Bloomberg reported last week that in 2015, Smile raised $ 365 million in equity, including $ 50 million in equity from the Public Investment Corporation, while $ 315 million was a multi-branch facility from the African Bank. import-export, Development Bank of Southern Africa, Diamond Bank. PLC, Ecobank Nigeria, Industrial Development Corporation and Standard Chartered Bank.