Technology
Safaricom PLC to Raise $150 Million in Local Currency Debt in Ethiopia via Bond Market by Q3 2024
Safricom intends to issue local currency-denominated bonds starting in September, leveraging Ethiopia’s new financial market infrastructure to support its expansion and operations within the country.
: Safaricom PLC to Issue Local Currency Bonds in Ethiopia Starting September to Support Expansion, Says CFO Dilip Pal, as Company Explores Debt Market Opportunities
By Charles Wachira
Safaricom PLC plans to raise up to $150 million (Ksh19.6 billion) over several years in local currency debt in Ethiopia, once the country’s securities exchange launches in the third quarter of 2024.
The company intends to issue local currency-denominated bonds starting in September, leveraging Ethiopia’s new financial market infrastructure to support its expansion and operations within the country.
Safaricom’s CFO, Dilip Pal, stated that while listing the Ethiopia subsidiary publicly is not currently feasible, the company is actively exploring opportunities in the debt market for capital raising.
“We are closely monitoring this space and will consider listing at an appropriate time. We are very interested in the new bond market,” Mr. Pal told Business Daily following the release of the FY2024 earnings.
He mentioned that the company’s capital needs could range from $100 to $150 million, with the final amount dependent on future requirements, and this capital raising would occur over time rather than all at once.
Recently, Safaricom PLC has intensified efforts to reduce its exposure to foreign currency-denominated debt due to the significant depreciation of frontier market currencies like the Kenya shilling and the Ethiopian birr, which have increased finance costs and impacted company performance.
In the six months ended September 2023, Safaricom PLC retired a $120 million (Ksh15.6 billion) foreign currency loan just a year after securing it through a syndicated arrangement. This loan, intended to finance capital expenditure in Ethiopia, was paid off four years ahead of schedule due to heightened foreign currency exchange pressures in markets such as Kenya and Ethiopia.
Keywords:Safaricom Ethiopia bonds:Local currency debt:Capital raising plans:Ethiopian securities exchange:Foreign currency loan repayment: