Senegalese telecom services provider Societe Nationale des Telecommunications du Senegal (Sonatel) has revealed plans to repay XOF3.25 billion ($5.6 million) in debts to creditors on Jan. 16, 2022.
Sonatel is a leading subregional telecom services provider operating in Africa as a subsidiary of Orange S.A., a French multinational telecom corporation.
The group maintains active operations in Senegal, Mali, Guinea, Guinea-Bissau and Sierra Leone under the leadership of Senegalese businessman Alioune Ndiaye, the first African to lead an Orange subsidiary.
The $5.6-million payment to creditors represents its biannual interest payment commitments under its Sonatel 6.50-percent 2020-2027 bond.
The board revealed that the payment is a strategic attempt to strengthen investor confidence and its credit rating, which was rated AA- and assigned a stable outlook by the West Africa Rating Agency S.A., a Senegal-domiciled, Francophone Africa-focused credit rating agency.
This comes more than a year after the company raised the largest corporate bond in Francophone West Africa amounting to XOF122 billion ($210 million) in an effort to finance a 2020 investment plan linked to its operations in Senegal, its main market.
The group revealed that the XOF122 billion in proceeds that it received from its debt program will help to bridge its immediate finance capital expenditure requirements and optimize its earnings by leveraging the low-interest-rate environment in the region.
The move aligns with the company’s strategic attempt to pursue its investment policy to place its revenues and earnings on the path of sustainable growth and diversify its economic model.
As of December 2020, Sonatel had a financial debt of XOF283.1 billion ($488.5 million), 58.4-percent higher than its financial debt of XOF178.7 billion in 2020. During the period, interest payable on its bond portfolio was valued at XOF2.97 billion ($5.1 million).
In the first nine months of 2021, Sonatel recorded a 10-percent surge in revenue to CFA984.5 billion ($1.7 billion), which spurred its pre-tax and interest earnings by 13.2 percent to CFA430.3 billion ($743.9 million).
The growth in its revenue and earnings in the period under review was spurred by a 9.5-percent growth in its customer base from 34.9 million in 2020 to 38.2 million as of Sept. 30.