Liquid Telecom has raised $307m via a rights issue to fund data center projects across Africa.
Right issues are internal sales of shares and stocks to a company’s shareholders for them to buy additional shares and raise capital for the company.
Liquid Telecom is one of the largest network operators in Africa and is majority-owned by Econet Global, Strive Masiyiwa's company. Liquid has built more than 70,000 kilometers (43,500 miles) of fiber and operates five data centers in South Africa, Kenya, and Rwanda. It also plans to build data centers in five of the continent’s fastest-growing digital economies such as Egypt and Nigeria.
Liquid announced $40m of the funding round came from the UK development finance institution CDC Group. This is CDC’s second investment in the company, following a $180m investment in 2018.
“This will play an important role in addressing the increasing demand for digital services and help close the digital divide between Africa and other regions," CDC CEO Nick O’Donohoe said. "Investing in Africa’s digital infrastructure is vital for building resilience within African economies and accelerating their growth.”
CDC is funded by the UK government and will invest more than $1.5bn in African and Asian businesses this year.
Nic Rudnick, Group CEO of Liquid Telecom added: “CDC’s additional equity investment into Liquid Telecom represents another crucial step in connecting businesses in Africa, with Liquid Telecom at the forefront of the continent’s eruption in technology adoption. Africa has significant untapped economic potential that is being unlocked by improving connectivity, data storage, and the use of cloud-based applications. This investment will bring significant economic benefits to developing markets across the continent.”
One of its subsidiaries, Africa DC, finalized its acquisition of Standard Bank’s Samrand data center in South Africa back in September. The data center is a 65,000 sq m (700,000 sq ft) site, built to Tier IV standards and located in Samrand, north of Johannesburg.
Strive Masiyiwa, the owner of Liquid Telecom, has been looking to pay off a $375m loan from South African pension fund Public Investment Corp. Masiyiwa told journalists: “We used a combination of equity and sold shares to existing shareholders, and also a debt to complete the financing. In each situation, we had to make big pitches to investors. I had to lead some of them myself, and it sometimes felt like Shark Tank, except it was tougher and each pitch takes weeks to complete.”
Since July, the Zimbabwean billionaire has been looking to sell between 20 and 34 percent of Liquid Telecom and make around $600m.