MTN Group has settled US$300-million (R5.2-billion) in Eurobonds that were due in 2024 early, helping deleverage its balance sheet.
The early repayment brings MTN’s dollar-denominated debt down to 35% of total holding company debt (on a first-half 2022 proforma basis), the group said on Monday.
In late August, MTN invited eligible holders of the $750-million Eurobond – due to mature in November 2024 – to tender their notes for purchase by the company for cash.
“The offer attracted tenders of more than $482-million, significantly more than the $250-million originally intended for early settlement,’ MTN said. “As a result, MTN raised the final acceptance amount to $300-million, which will be settled on 6 September 2022.”
“In line with our Ambition 2025 strategy, we are committed to deleveraging the balance sheet faster in line with our capital allocation framework,” said MTN Group CEO Ralph Mupita in a statement. “This week’s early settlement supports delivery of this commitment as well as of the execution and delivery of our medium-term guidance to maintain the holding company leverage below 1.5 times.”
MTN Group chief financial officer Tsholofelo Molefe said that as the settlement would be funded from available cash balances, it did not affect the pro forma holding company leverage of 0.8x at 30 June 2022. “However, on a pro forma basis, the settlement improves the end-June 2022 ratio of non-rand-to-rand debt to 35:65 from the 42:58 ratio reported in the group’s interim results.”