08 July 2022

Pan-African telecom group Smile Telecoms Holdings, which operates in Tanzania, the Democratic Republic of Congo (DRC), Nigeria and Uganda will benefit from a US$120m financing from its majority shareholder Al Nahla Group.

The company, which was under threat of liquidation in March 2021, can now expand its network footprint in Tanzania, among other things.

Zuweina Farah, country manager, Smile Tanzania, said the new investment will enable the mobile operator to continue offering the best 4G LTE broadband internet services in Tanzania. Using the latest technology in the field, the company plans to provide its subscribers with “speeds of up to 50 Mbps.”

The investment pledge follows Smile’s restructuring plan announced in early February, which included “the takeover of the company by the super senior lender and additional new funding from the super senior lender.”

In March 2021, Smile Telecoms was threatened with liquidation, mainly due to a US£365m debt raised five years earlier to finance its growth ambitions. However, the company was able to count on the last-minute rescue of Nahla Group, which invested US$51m after the approval of the operator’s debt restructuring plan by its creditors.

Public Investment Corporation (PIC), the pension fund of South African civil servants, which had lent US$50m to Smile Telecoms in exchange for 7.69% of its shares, was exercising its put option on its shares, which expired March 31, 2021.

Smile Group said the new funds implemented through the restructuring plan will strengthen and enable the company to “safeguard its operations and achieve its business objectives”. Specifically, the group will further strengthen its position in its various markets, boost its operations and improve its efforts to achieve better telecom performance for consumers.