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Although African telecom operators are potentially attractive to banks and non-bank lenders, they must have strong finance teams to deal with lenders, Sophie Papasavva

Mezzanine capital is a long-term finance instrument, that is typically non-amortising. Mezzanine ranks second secured in the capital structure of a company and is thus subordinated to bank debt. As a hybrid instrument that is positioned between senior loans and equity, mezzanine typically contains characteristics of both debt and equity.

During any economic downturn, banks and other lending institutions typically retreat to core markets, core clients and substantially reduce their lending activities. At the same time, certain highly-structured loans have historically been developed to protect lenders against exactly such difficult conditions or against other risks more prevalent in emerging markets.

Gone are the days when Greece’s CFOs called their house banks asking for money and a cheque would promptly arrive in the post (or near enough). Gone are the days when borrowers shoved their bankers in a room and let them fight over ever-decreasing pricing and lead roles for multi-million euro syndications.

Africa needs more telecom service providers - many more. The Continent boasts 500 million mobile SIMs and an estimated 500 million more people yet to acquire a telephone connection. Despite an average of four Mobile Network Operators (“MNOs”) per country, Africa’s mobile subscribers are still not serviced adequately.

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