Shareholders trying to hold up Smile

Shareholders trying to hold up Smile

South Africa’s Public Investment Corporation (PIC) is holding discussions with shareholders in a bid to avert the liquidation of pan-African operating group Smile Telecoms Holdings.

Bloomberg reported that Smile last month began a restructuring programme, but could yet face liquidation unless the PIC – a creditor and minority shareholder of Smile – agrees an outstanding put option with the operator’s largest shareholder, Saudi Arabia’s Al Nahla group.

This would result in Smile defaulting on a series of senior loads worth around US$250 million. Its lenders, among them a number of African banks, would be forced to suffer these losses.

As part of Smile’s restructuring, Al Nahla proposed a cash injection of US$50 million into the unit in exchange for the PIC granting additional terms to a put option for the sale of its stake to the other shareholders for US$45 million. This payment was due on 24th March; if no agreement is reached then the restructure may fail.

TeleGeography notes that Smile Telecoms Holdings was founded in 2007. Registered in Mauritius, the group offers mobile and broadband services in Nigeria, Uganda and Tanzania, and is looking to launch in the Democratic Republic of Congo (DRC).

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