Seacom to get Sh30bn IFC loan for expansion

Fibre-optic cable

Workers lay a fibre-optic cable. 

Photo credit: File | Nation Media Group

What you need to know:

  • World Bank says part of the credit facility will be used in refinancing the cable debt.
  • Seacom is currently embarking on a five-year plan to diversify from its subsea cable operations.

Submarine fibre optic cable project, Seacom is set to get a Sh30.16 billion($260m) loan from the International Finance Corporation (IFC) for debt-refinancing and expansion into new service lines.

A disclosure by the World Bank’s private sector lending arm said the expansion is expected to boost small and medium enterprises (SMEs) and large corporates in South Africa, East Africa, and West Africa.

“Seacom seeks to diversify from its subsea cable operations into the enterprise service provider market across the continent and refinance its short-term debt with new longer-term debt,” IFC said.

“Through the project, IFC will help one of the important digital infrastructure companies to increase its enterprise services capabilities to SMEs, medium and large corporates in South Africa, East Africa, and West Africa; leveraging its fiber network spanning 21,000 km (including 17,000 km on its submarine cable) as well as its strategic alliances on the 2Africa Cable and Equiano Cable.”  

The 2Africa Cable — with a network of over 45,000km — is presently the longest subsea cable system ever deployed and run by a consortium, comprising  China Mobile International, Facebook, MTN GlobalConnect, Orange, stc, Telecom Egypt, Vodafone, and WIOCC.

Equiano cable system is the third private international cable owned by Google and the 14th subsea cable invested by Google. It connects Portugal and South Africa, running along the West Coast of Africa, with branching units along the way that can be used to extend connectivity to additional African countries. The first branch is expected to land in Nigeria.

The IFC said Seacom’s targeted growth plan will be achieved through strategic acquisitions and organic growth initiatives across its markets.

Seacom is currently embarking on a five-year plan to diversify from its subsea cable operations in Southern, East, and West Africa by building out its integrated enterprise business and expanding its footprint in the region.

The company is principally owned by Remgro with a 30 per cent stake, IPS Cable System(IPS) -- the industrial development arm of the Aga Khan Fund for Economic Development(40percent), Convergence Partners (15percent), and Sanlam (15percent).

Insurance group Jubilee Holdings in March announced that it had purchased an additional 10 per cent stake in Seacom for an undisclosed sum, raising its ownership in the venture to 18.8 percent.

The Nairobi Securities Exchange-listed firm, which owns shares in Seacom indirectly through IPS, previously owned an 8.8 per cent stake in the company.

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