Kenya phone firm eyes debt market again

December 9, 2009

, NAIROBI, Kenya Dec 9 – After a successful second bond issue, listed telecoms company Safaricom said on Wednesday it could soon turn back to the debt capital market to raise more funds.

Safaricom Chief Executive Michael Joseph said depending on how the money from the bond is used, the capital market remained a sure and effective tool for raising finances for their network development.

“If need be we will come back into the market in 2010 so that we can have money to invest into our data network,” Mr Joseph said.

He was however not specific about when this would happen asserting that the company had already borrowed enough.

“Some investors say we have not borrowed but in my opinion we have borrowed enough.  All that remains is to invest that money wisely,” he said.

He was speaking during the listing of Safaricom’s bond at the Nairobi Stock Exchange (NSE).

The telecommunications company recently announced it had raised Sh7.5 billion from the first tranche of its Sh12 billion target.

According to the Information Memorandum, the second Sh5 billion tranche will be issued in April 2010 while the remainder is expected to be launched in September 2010.

This marked 50 percent oversubscription of the intended Sh5 billion. He said money from the bond would be used to enhance data and Wimax networks.

“The Sh7.5 billion raised through this issue will go towards the financing of some key capital and operational projects, further consolidating our market leadership and sharpening our product and service offering in response to increasingly diverse customer needs,” Mr Joseph said.

The heavy investment in data is one of Safaricom’s strategies of repositioning the company as a complete telecoms operator.

He acknowledged the company has been consistently rolling out a steady stream of innovative products as a key plank in its push to increase data penetration in the market while leveraging on anchor stake in the TEAMS undersea cable and the substantial capacity recently acquired in SEACOM.

“To push this drive, we have acquired the exclusive usage of Jamii Telecoms’ expansive metro fibre network in key cities in Kenya. Last year, we acquired a majority stake in One Com and are in the process of a similar move on Packet Stream Data, both of which use Wimax technology,” he said.

From a recent tour to Europe, Mr Joseph revealed investors were very keen on taking up investment opportunities in the country.

He said contrary to popular belief, investors were unperturbed by the political environment in the country and instead focus on areas they could invest their money.

“They are quite unemotional about the politics, they are more interested in the way Kenya has been stable for some time and that there are good opportunities and a way to invest and get a return on their investment,” he said.

One area he said they were particularly interested in was the telecommunications sector which has witnessed renewed vibrancy over the years.


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