NuRAN Wireless Inc., a leading rural telecommunications company, has announced the receipt of a second mandate letter for a senior secured credit facility (the “Loan Facility”) with a development finance institution (DFI) that provides up to EUR 8,000,000 (approx. US$9,000,000) in total funding. The purpose of the Loan Facility is to finance a portion of NuRAN’s planned US$30,000,000 of expenditures linked to the installation of network infrastructure roll-out promoted by NuRAN in Cameroon and Democratic Republic of the Congo (DRC) (the “Project”) and follows the previous announcement of 6th January of a DFI loan facility for US$15,000,000. The combined proceeds of approximately US$24,000,000 will be used for project expenditures relating to the installation of network infrastructure by NuRAN and roll out of up to 120 rural sites in Cameroon and 850 sites in DRC. The Loan Facility is conditional on, amongst other customary conditions in a financing of this nature, NuRAN raising the remainder of the US$30,000,000 in funding for the Project.
NuRAN is in advanced discussions with other funding institutions for the majority of this remaining amount of USD$6,000,000. In addition, NuRAN has already contributed approx. US$5,100,000 in equity over and above the Project expenditures, which includes the first phase of 122 sites in Cameroon through the private placement proceeds previously announced and which includes Spacecom’s investment in July 2021.
“This financing further confirms the bankability of our contracts. We are so pleased with the level of interest in supporting our roll out of these sites in Africa. The NAAS model is a game-changer, and we are anxious to charge ahead with our roll out plan while we continue to add countries and sites in our quest to reach at least 10,000 sites by 2025.”Francis Letourneau, CEO, Nuran Wireless Inc.
The balance of funding is to be raised in cash through equity or additional debt. A holding entity for the African operations is to be established for the Project, and it is expected that the balance of funding will be raised at this level. Further debt and equity funding beyond the Project will be contemplated at the appropriate time which will allow for the completion of the build of the full 2,000 sites in DRC as well as the build of the South Sudan contract with MTN announced previously.
The Loan Facility is for a term of seven years including a two-year grace period on repayment of principal and disbursements may be requested up to 36 months following the execution of definitive agreements for the Loan Facility. The Loan Facility will be subject to standard security for this type of financing and is subject to the lender’s due diligence and other customary conditions, events of default and covenants to be outlined in the definitive agreements respecting the financing. Interest under the Loan Facility is due on all disbursed sums and is to be paid semi-annually or annually in arrears on predetermined payments dates. The interest rate is calculated based on a margin over six months EURIBOR. There is no assurance that the definitive documents for the Loan Facility will be entered into with the lenders as planned or at all.