Malagasy businessman Hassanein Hiridjee’s AXIAN Telecom launches $420 million bond; IFC and CDC commits $80 million

AXIAN Telecom, a pan-African telecommunications services provider, has successfully launched a $420-million bond program to meet its working capital requirements while supporting digital connectivity and transformation in Africa.

The telecom company, which serves around 33 million mobile customers through its operations in Tanzania, Madagascar, Togo, Mauritius, Uganda and Comoros, is an operating subsidiary of AXIAN Group, a pan-African conglomerate based in Madagascar.

Under the leadership of Malagasy businessman Hassanein Hiridjee, the conglomerate maintains active operations in the real estate, telecom, finance and energy industries in six countries across the Indian Ocean and African continent.

The successful pricing of the five-year bond, which runs due in 2027, was supported by anchor orders from development finance institutions such as the CDC Group, The Emerging Africa Infrastructure Fund and International Finance Corporation, a member of the World Bank Group.

The IFC committed $50 million to the bond, representing 12 percent of the $420-million bond, in an effort to position Hiridjee’s company as a leader in the telecommunications sector. Meanwhile, CDC Group invested a total of $30 million in the telecom company’s inaugural bond offering.

CDC Group, which will be renamed British International Investment in April, said the provision of the new financing will allow AXIAN Telecom to expand its footprint through increasing access to affordable mobile and data services.

According to Richard Palmer, head of corporate debt at CDC Group, the capital injection will drive AXIAN Telecom’s expansion into underserved markets and disrupt monopolistic pricing policies and dated product offerings while also improving vital digital infrastructure.

She added that it will also pave the way for digital connectivity in Africa.

The bond’s order deal was 2.2X oversubscribed at the time of closing, with half of the investors coming from the United States. The funds raised will be used to finance working capital needs, pay off existing debts, and fund general corporate expenses to support AXIAN Telecom’s growth.

In a statement about the transaction, Hiridjee, the founder and chairman of AXIAN Telecom, said the transaction’s success reflects the company’s resilient and diversified business model based on mobile and fixed, infrastructure, and digital operations.

“This financing will support our vision of serving and positively impacting the populations in our country of operations, while also accelerating digital transformation and inclusion,” he said.

AXIAN Telecom reported a five-fold increase in profit from $25.3 million in 2020 to $133.7 million in the first nine months of 2021, driven by a combination of effective cost-cutting strategies and an increase in service revenue during the nine-month period.

The telecom company’s revenue increased from $302.1 million in 2020 to $346.1 million during the nine-month period.