Investec has taken charge of arranging R2.5 billion in debt funding for MetroFibre Networx, a South African fibre infrastructure provider.
“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,” says Wayne Edwards, Financial Director of MetroFibre.
“In a growing and fiercely competitive market, the timely funding arranged by Investec, together with our recent R1.5 billion equity raise, will enable us to take fibre to more individuals and more businesses, giving them the opportunity to participate in the globally connected economy.”
The funding agreement builds on an existing relationship between the two companies that dates back to 2016 when MetroFibre approached Investec for its first-ever round of debt financing. Back then, MetroFibre was still in a nascent phase, but Investec saw its potential.
“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,” says Laverne Chetty, Investec Specialised Finance.
Together with the funding from their capital raise toward the end of 2020, MetroFibre plans to densify their existing networks and reach an additional 300,000 residential homes across the country over the next three years.
Edwards explains the strategic importance of having funds available at this watershed moment for the fibre industry.
“We believe the fibre market has reached a tipping point. People are spending more time in their houses which has drastically increased the demand for high-bandwidth internet services, both for the purposes of working from home, education and for entertainment. Fibre is going mainstream.”
In concluding, Investec’s Chetty reiterated that their support for MetroFibre’s next era of growth is about more than just backing a business they believe in.
“Greater access to reliable telecommunications, of which fibre connectivity is playing an increasingly bigger role, has been shown to drive economic growth, increase access to education, and provide a myriad of social benefits,” he says.
Follow IT News Africa on Twitter