Case Study: Funding for a communications startup

SECTORFunding

Mobile telecommunications.

BACKGROUND

A Mobile Virtual Network Operator (MVNO) required growth capital to expand into neighbouring countries.

CHALLENGE

The MVNO was a new operator who was unable to offer tangible assets to provide security to lenders in order to raise funds to meet licence payments.

SOLUTION

EFM’s Mike Fletcher designed and arranged a syndicated mezzanine facility to provide the necessary finance for its expansion.  The facility was structured to meet the expected cash flow profile of the new business, with limited cash pay interest and a capital repayment holiday.  These features were balanced by the MVNO, providing the syndicate with an equity kicker in the form of nil paid warrants on its ordinary shares.

BENEFIT

The MVNO was able to meet its licence fee obligations and commence operations in the new territories.

Case Study: Mike Fletcher (Click here to see his profile)