Smile investors in talks to avoid liquidation

26 Mar 2021

South Africa’s Public Investment Corporation (PIC) and Saudi investors are in talks to avoid a potential liquidation of pan-African operator Smile Telecoms Holdings, reports Bloomberg, citing people familiar with the matter. If PIC, which owns a minority stake and is a creditor to Smile, fails to reach an agreement over an outstanding put option with the Al Nahla group, the largest shareholder, then Smile could be forced into liquidation and lenders including a group of African banks could suffer losses on the bulk of about USD250 million senior loans.

Smile Telecoms launched a restructuring plan last month, with Al Nahla leading a proposal to inject more than USD50 million cash in the company provided PIC extended the terms of an option to sell its stake to other shareholders for USD45 million, the unnamed sources said. The payment on the put option was due on 24 March and without an agreement on the put option, the overhaul could fail.

Mauritius-based Smile Telecoms Holdings was founded in 2007 and provides mobile and broadband services in Nigeria, Uganda and Tanzania, with plans to launch in the Democratic Republic of Congo (DRC).