Smile Telecoms aims to rebound through restructuring

Last month’s restructuring should ease pressure on the Africa-focused telecoms company, with Afreximbank playing a role as a leading lender.

Smile Telecoms, the London-headquartered mobile broadband provider which operates in Nigeria, Uganda and Tanzania, has restructured its finances, with help from lenders including a major African development bank.

The restructuring plan was approved by lenders on 1 April this year, with the company receiving USD 51 million in funding from majority shareholder Al Nahla and rescheduling its debt repayment until after March next year. Al Nahla, a Saudi Arabian holding and investment company, provided the funding through a new Luxembourg-registered subsidiary.

The restructuring was required after a series of setbacks including the downturn in Nigerian currency since 2016, and the impact of the Covid-19 pandemic.

The deal has streamlined the company and has amended the lenders’ senior facilities, and the restructuring was approved by Mr Justice Trower in the Chancery Division of London’s High Court at the end of March.

International law firm Hogan Lovells advised lender and syndicate agent African Export-Import Bank (Afreximbank) on the deal. The development bank’s involvement with Smile dates back to 2015.

The company launched its 4G mobile broadband in Tanzania and Uganda in 2013, followed by Nigeria in 2014, and is due to open in the Democratic Republic of Congo in the near future.

Smile moved its headquarters from Mauritius to London on 1 January, the same date that the company’s co-founders and respective deputy chair and co-chair, Irene Charnley and Mohammad Wajih Sharbatly retired from the company.

London-based lawyers from Hogan Lovells acted on the restructuring, led by partners Joe Bannister and Andrew Taylor, working with counsel Russell Green, senior associate Lucy Xu and associate Luke Hiller-Addis.

Hogan Lovells launched a sovereign debt practice in March, reflecting rising debt levels in many regions, including numerous African jurisdictions, while the firm advised Spotify on this year’s expansion into Africa and Norwegian development finance institution Norfund on a February investment in the Kenyan energy sector.

A recent Afreximbank report highlighted Africa’s trade finance gap, while the bank was part of a group that provided backing for trade finance factoring in Africa at the start of the year.