Strive Masiyiwa Shares How They Funded Liquid / Neotel South Africa Acquisition in a detailed post that read;
“The biggest acquisition done by our company Liquid Telecom was to buy Neotel South Africa from Tata Communications of India about 4 years ago. The deal cost us more than $US500m (ZAR 6.5bn). Here is how we funded it:
#1. We sold shares to one strategic Institutional Investor to raise 30% (US$150m). Banks will always insist on a deal like this that you put up equity.
#2. We borrowed 70% from a consortium of South African banks. This was a “bridge facility,” which means we had to replace it within one year.
#3. After the deal closed (“Deal Closure”), we reorganized the business quickly, and integrated it into a wholly-owned subsidiary of Liquid Telecom. Then we went to the “Bond Market” to borrow five-year money to replace “The Bridge”. (This is how #Entrepreneurs talk).
We published an international prospectus similar to an IPO (Initial Public Offering) prospectus, but it was only to Bond Investors. We did pitches to more than 100 Bond Investors in South Africa, Europe, USA, and Asia in just three weeks!
Yes, it was just like Shark Tank with very, very serious global investors!
It was issued by the Irish Stock Exchange. We managed to raise US$750m in the “Bond Issuance,” which was “Oversubscribed”.
#4. We then repaid the “Bridge Facility Banks” their money from the Bond Money.
So now I want you to go and study what a bond is. Don’t be satisfied with what you learn in a couple of articles. Keep digging and learning, because one day, surely, you will use it!
“How will they know if they have not been taught. And how can they be taught, if they do not have a teacher”. ~Apostle Paul