Safaricom, East Africa’s leading mobile phone company’s planned KSh 40 Billion Corporate Bond, presents immense benefits to investors while allowing the operator to cut its debt load, strengthen the network and recoup its investments in the Ethiopian subsidiary.
The Safaricom huge Corporate Bond is expected to attract huge investor interest given the firm’s strong financials, brand name and a dominant market position. Bond holders will be sure of attractive yields, stable stream of interest payments and adequate liquidity for those keen on trading these instruments in the secondary market.
Safaricom’s Medium Term Note(MTN) programme has an EAG component that includes green, social and sustainability bonds, which offers opportunity for investors, especially foreign players, keen to support environmental and socially responsible projects, while still earning good returns.
“The primary goal of this MTN programme is to enable Safaricom to better manage its financial risks. Current growth efforts, both locally and in Ethiopia, have been weighing on Safaricom’s balance sheet due to its heavy reliance mainly on foreign debt and internal financing options,” said CFA Dedan Maina.
He added that the Safaricom MTN plan is to support the mobile operator’s expansion in the loss-making Ethiopian business, reduce foreign currency debt burden and finance digital infrastructure growth plans, including expanding its M-PESA services platform.
The firm’s strategic plan and capital expenditure targets shows that the firm intends to spend between KSh 72 billion and KSh 75 billion in capital expenditure, including KSh 50 Billion going towards Kenya’s network expansion and upgrade.
The Ethiopian subsidiary, which is a target of the MTN programme, will a receive significant funding from the MTN proceeds, Safaricom has already sunk more than US$ 1.2 Billion into the Ethiopian business over the past four years and intends to spend another between US$ 1 billion and US$ 1.3 billion in Ethiopia over the next 5 years.
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The operator has plans to expand its 5G network, fixed network and digital services to drive future revenue streams. Already, the firm is piloting a new mobile trading platform, to allow retailers access the Nairobi Stock Exchange(NSE)platforms.
The mobile firm has set a Capital expenditure budget of between KSh 18billion and KSh 21 billion for the Ethiopian subsidiary as it continues the subsidiary’s network and market share.
Safaricom debt load as at 31st March 2025
As at 31st March 2025, Safaricom had Equity debt of US$ 2,048 Million, made up of Safaricom funding contribution of US$ 1,058Million or 51.67%. Other contributors include Vodacom Group (5.74%), Sumitomo Corporation (25.23%), British International Investment (10.11%) and IFC (7.25%).
The mobile phone company also had a shareholder loan of US$ 18Million, local currency debt of US$ 100Million and IFC Debt of US$ 100 Million.
At the close of financial year ended March 2025, Safaricom Kenya had a capital expenditure of KSh 52,111.2 Million for the Kenyan business, KSh 39,194.9 million on the Ethiopian business, bringing the total to KSh 91,306.2 Million.
The mobile operator’s net debt at the close of 2025 financial year amounted to KSh 64.5 Billion, made up of among other items, short-term borrowings of KSh 39.8 Billion and long term borrowings of KSh 36.1 Billion.
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