RECENTLY-launched VoIP mobile phone operator Broadacom has secured US$30 million to finance its network rollout, according to CEO Zach Wazara .
The funding, which follows a successful restructuring of the company’s balance sheet, had been secured from a local financial institution with international links, Wazara said in an interview.
He confirmed the company had managed to restructure its balance sheet as phase one of the capital- raising exercise aimed at doing away with the constraints imposed by short-term local loans.
“We had some expensive short-term local facilities which were weighing down our internal and external activities,”Wazara said. “We have just completed a highly successful process with our bankers in which all the company’s facilities have been spread over four years, with a twelve-month grace period on interest, and a two-year grace period on capital repayment. This has released a lot of the short term pressure imposed by the current liquidity crisis and paved way for the next round of financing, which will see additional capital – debt and equity financing, being injected into the business,” Wazara added.
The company was building additional eight base stations in Bulawayo, and 12 in Harare. “Work has already resumed and we have teams on the ground in both Harare and Bulawayo to complete the coverage in those cities. We expect Mutare to be switched on before the end of June, once the interconnection is completed. The base stations are already installed. Thereafter we should start working on the cities in between which we aim to complete over the next six months.”
Wazara confirmed that interconnection with Tel One was expected to be up and running by the end of the month. The company is already interconnected with Econet and Telecel, which between them account for more than 83% of the connected mobile customers.
Valley Technologies was granted a Class B Internet Access Provider licence by the Post and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) in 2008. The company went on to upgrade the licence to Class A in November 2009, thus enabling it to provide a converged data and voice service. Valley has built a US$20 million broadband network since 2010 financed by a combination of both short and long-term debt as well as equity.
There were also plans to introduce additional equity for up to 20% of the company.
“We are currently working on introducing additional equity for up to 20% of the company to complement the debt we have organised. Our bank and advisors are now working on the execution of a US$30milion, 10-year facility with a three-year grace period on interest and capital for which we received and signed a term sheet last week. This should see the company building its operations on a more continuous and sustained basis, and should exclude it from the effects of the very acute liquidity challenges facing the country,” Wazara said.