MTN Group, Africa’s largest mobile carrier by subscribers might not be able to borrow, sell more debt or raise funds in the money market should its situation remain the same.
These concerns were raised by Moody’s earlier today (Monday).
The top ratings agency said MTN Group phone operator MTN Group has limited room to increase its debt levels, rating agency Moody’s said on Monday, citing lack of dividend flow from Nigeria – its biggest market.
Moody’s added that “Financial flexibility could be restored should MTN be able to begin repatriating dividends from its Nigerian operations, however there is uncertainty over timing,”.
MTN disclosed last week that it recorded a net loss of ZAR2.6 billion in its full year 2016 result. The first ever loss in its 20 years of operations.
There are also systemic challenges faced in South Africa, its home country. There were technical problems and strikes in its customer care unit that disrupted its operations. Nigeria’s Forex drought is not also helping matters.
The sharp drop in industry revenue due to drop in international calls caused by over-the-top application (OTT) will further put more pressure on the market leader.
Last year, MTN Group sold some debts with other notes and bonds to be due in the next few years.