Senegal’s Sonatel launches West Africa’s largest corporate bond

SENEGAL – Sonatel S.A, Senegal’s largest telecommunications company, has launched what is believed to be West Africa’s largest corporate bond issue with the support of The Emerging Africa Infrastructure Fund (EAIF).

EAIF recently anchored a successful bond issue for another African telecommunications business, Helios Towers, which raised $750m and was over-subscribed.

A report by Africa Global Funds indicated that Emerging Africa Infrastructure Fund had agreed to support Sonatel with an investment of around US$50 million to help the telco giant successfully launch its bond issue.

The report further explained that Sonatel had an ambitious aim of raising up to US$170 million from the mega bond issue to help it boost investments in its Senegal business.

A huge chunk of the bond proceeds will be used by Sonatel to extend and enlarge its 4G + network in urban and rural areas and renew and upgrade service platforms.

Sonatel’s other activities such as energy, banking and multimedia content, will also benefit from the bond fundraising.

“In the light of Covid-19, telecommunications are more vital to economic recovery and progress than ever,” Sumit Kanodia, Investment Director at EAIF’s managers, Ninety-One, said.

“Sonatel’s investment in its largest market will support Senegal’s ability to strengthen its economy and compete on the global stage.”

Given current global financial market conditions and recently untested investor confidence in Senegal, EAIF is acting as the bond’s anchor investor and underwriter

“EAIF and PIDG are pleased to be playing such a fundamentally important role in the bond issue,” Sumit Kanodia added.

Sonatel’s bond, which was launched on June this year, will have a 7-year term with a coupon rate (interest paid to investors) of 6.50%, payable twice a year.

Sonatel, has its HQ in Senegal where it oversees operations in Mali, Guinea, Guinea-Bissau and Sierra Leone.

It is the telecommunications market leader in all five countries, operating business and residential fixed line and mobile telephone services, broadband internet, corporate communications, television and mobile money.

Sonatel has recently entered the off-grid energy market by introducing Orange Energie’s Solar Home System (SHS) kits in all its subsidiary companies.

The SHS kits are designed specifically for homes and small businesses in rural areas and are made affordable to all thank to micro payments with Orange Money.

In addition to the Orange Group’s holding in Sonatel, local private investors own 22.5% of Sonatel’s shares that are listed on the regional stock exchange. The government of Senegal, holds 27% and employees own 8% of the stock.

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