Safcom still eyeing debt market

April 24, 2009

, NAIROBI, Kenya, Apr 24 – Mobile phone operator Safaricom says its plans to raise between Sh5 billion and Sh12 billion from the debt capital market are still on course.

Safaricom Chief Executive Officer (CEO) Michael Joseph told Capital Business on Thursday that they were currently putting in place the various legal structures to be able to borrow the money from the market.

“I don’t want to give you a time line but it is still on course. We are just appointing the various advisers and all the things like that have to go. We still intend to come to the bond market,” he said.

Mid last month, the company had announced that it would release, in a few days, the structure on how it intended to go about the process.

Mr Joseph also hinted that the funds would most likely be raised through a Corporate Bond as opposed to a Syndicate Loan that they were initially considering.

The bond market has become popular with investors as an instrument for raising long-term debt since the first government infrastructure bond was oversubscribed by 45 percent despite having been issued when the market was depressed.

At the same time, the CEO said although The East Africa Marine System (TEAMS) undersea cable is expected in a few months, Safaricom would continue to buy additional satellite capacity to meet the demand for international bandwidth. The operator has a 20 percent stake in the cable.

The company had in August last year commissioned satellite bandwidth to the USA which enables them to have a direct link to the US, enable their customers’ access to high internet speed. He disclosed that they added capacity in February and March.

“Our need for international bandwidth continues to grow and we are in the market to buy whatever decent satellite capacity that we can get. When the cable (TEAMS) arrives, there is a period of testing and extending that cable so I’m expecting that ‘ready for service date’ will take a few months,” he said while forecasting that this would be sometimes in August.

Mr Joseph spoke after handing eight winners with cheques worth Sh1 million each in the ongoing ‘Lipua mamilioni’ promotion, which he said is one of their best campaigns ever.

A ‘boda boda’ rider, a fruits vendor and lorry driver were some of the people who walked away with the cash. The 30-day promotion is aimed at rewarding both PrePay and PostPay customers for their loyalty and support to the company.

Last week, the company awarded Sh7 million to the second batch of winners of the promotion that will see 30 lucky Safaricom subscribers win Sh1million and another 300,000 will receive Sh100 each as a consolation prize.

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