Strive Masiyiwa's Econet secures billions in funding

Econet Wireless unit Liquid Telecom has secured US$300m (about R4,3bn) to help fund expansion in Africa and its R6,5bn acquisition of Neotel.

Standard Bank is arranging the syndicated loan to help fund the Neotel purchase and other deals underway in Botswana and Tanzania, Liquid CEO Nic Rudnick said in an interview in Cape Town.

The company will take on Neotel's debt as part of the deal struck with Indian seller Tata Communications that's expected to close early next year.

"The purpose of the additional funding would be to allow the group to expand," Rudnick said. "Our strategy is to roll out fibre continuously and to bolster that with sensible acquisitions."

The funding will help Econet pursue its strategy of expanding in Internet services and pay-television in sub-Saharan African to take advantage of cheaper and faster broadband access.

The company founded and run by Zimbabwean businessman Strive Masiyiwa also owns Zimbabwe's biggest wireless carrier and plans to start a TV product to challenge market leader Naspers.

Liquid agreed to buy Neotel in June when Vodacom abandoned its own pursuit after regulators attached stringent conditions to the deal.

Following the completion of the Neotel deal, Liquid could consider selling shares in the combined entity on a stock exchange, according to Rudnick.

"We haven't made a final decision on this as we just completed a funding drive," he said.