Safaricom PLC is planning to raise up to $150 million (Sh19.6 billion) in local currency debt in Ethiopia once the country’s securities exchange becomes operational in the third quarter of 2024.
This amount translates to approximately 8.6 billion Ethiopian Birr at the current exchange rate, which the company intends to raise through the issuance of local currency-denominated bonds starting from September. Safaricom’s CFO Dilip Pal stated that while going public via listing may not be feasible for Safaricom’s Ethiopia subsidiary at present, the company is closely monitoring opportunities in the debt market for capital raising.
Mr Pal expressed the company’s interest in the emerging bond market, indicating that their financing needs could range from $100 to $150 million equivalent, which they may raise over time rather than in a single instance. Recently, Safaricom PLC has intensified efforts to reduce its exposure to foreign currency-denominated debt, due to the significant depreciation of frontier market currencies such as the #Kenyan shilling and the Ethiopian Birr. This depreciation negatively impacts companies’ performance by increasing finance costs.
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