Masiyiwa’s Liquid Telecom raises US$840m in bond sale for Africa expansion, debt refinancing

Strive Masiyiwa (far right), with Liquid CEO Nic Rudnick and Troy Reynolds of Tata Communications, 2016

Liquid Telecom, a unit of Strive Masiyiwa’s Econet Global, has raised US$840 million in a bond sale to refinance debt and fund its African expansion.

Liquid engaged JPMorgan Chase & Co, Standard Chartered and Standard Bank Group to jointly run the bond.

The placement included US$620 million in the international bond markets as well as a US$220 million equivalent South African Rand term loan, Liquid said in a statement. At launch, the bond attracted at least 230 investor orders, including anchor orders from the International Finance Corporation (IFC), DEG and the Emerging Africa Infrastructure Fund (EAIF).

The order book, which totalled US$3.2 billion, was more than five times oversubscribed helping to drive a coupon rate of 5.5% compared to the Group’s 8.5% debut bond coupon in July 2017, the company said.

“The level of interest from high-quality investors has been unprecedented for an African issuer and reflects an excess of 220 investor orders,” Liquid chief financial officer Kate Hennessy said. “The order book shows the confidence that investors have in the future growth strategy for the group.”

IFC subscribed to 16% of the bond, equivalent to US$100-million, which was listed on Ireland’s main stock exchange, Euronext Dublin. EAIF committed to buy up to US$50 million of the Liquid bond.

EAIF is one of Africa’s biggest infrastructure funders; over the past year it has invested in telecoms firms such as Sonatel and Helios. It is also involved in the financing of Zimbabwe’s Beitbridge Border Post expansion project, where it is lending US$43.7 million.

Liquid expansion

Liquid is Africa’s largest fibre provider, with over 70 000km of fibre across the continent. The company is also looking to take advantage of growing demand for data storage, scaling up investment in data centres.

So far, Liquid runs five data centres in South Africa, Kenya and Rwanda. In December, Liquid arm Africa Data Centres acquired Standard Bank’s Data Centre business.

Last year, Bloomberg reported that Masiyiwa was seeking buyers for a 20% to 34% stake in Liquid, hoping to raise US$600 million. He needed the money, the report said, to repay a US$375 million-loan to South Africa’s Public Investment Corp backed.

Britain’s development finance institution, the CDC Group, made a US$40 million equity investment into Liquid Telecom last year, adding to an earlier US$180 million investment in 2018.

Liquid Telecom reported revenue of US$773 million last year.