South Africa’s MetroFibre borrows $169 million to expand network
MetroFibre Networx of South Africa has borrowed 2.5 billion rand (US$169 million) to expand its open-access fibre network across the country.
UK/South African bank Investec, which arranged the loan, said that MetroFibre will use the financing to extend its fibre connectivity into under-served homes and businesses.
Wayne Edwards (pictured), MetroFibre’s CFO, said: “There’s a massive demand for fibre connectivity in many outlying regions. Filling that gap makes sense not only from a business perspective, but also from a socioeconomic upliftment standpoint.”
MetroFibre Networx is a carrier class Ethernet infrastructure company that today provides highly managed fibre optic broadband connectivity in South Africa.
Its customers include service providers, resellers, and owners of residential and business properties, as well as consumers.
The loan made by MetroFibre Networx from Investec follows the fundraising of 1.5 billion rand that the company carried out at the end of 2020.
Edwards said that with the total of 4 billion rand ($270 million), MetroFibre Networx wants to connect 300,000 additional homes and businesses over the next three years.
Laverne Chetty, a specialised finance consultant at Investec, said: “Debt funding is usually only possible once a company has a long, established track record. But we saw MetroFibre’s potential very early on and subsequently provided specialised capex funding, structured to promote their growth over time. That funding proved justified as MetroFibre’s s growth accelerated meaningfully during 2018 and 2019.”
Last month Investec provided funding to rival South African fibre operator Vox Telecom to help it expand its fibre network beyond the major cities of the country.
In that case, neither Vox nor Investec put a figure on the deal.
MetroFibre’s Edwards said: “The fibre market moves quickly so we need a finance partner that can do the same. Investec has been with us from the beginning, so they understand our business model and what we are working to achieve. We are immensely excited about taking the benefits of high-quality fibre connectivity to the country as a whole. And for that journey to be successful, having the right partners remains paramount.”
Lourens Campher, head of Asset Finance at Investec, said: “Growth in connectivity is one area that benefitted from the Covid-19 pandemic. It was growing fast before, but we are currently seeing enormous growth as people started to adapt to a new lifestyle.”