Pakistan Mobile Communication Limited, the official name of the Mobilink, has concluded the payment of Term Finance Certificate (TFC) of Rs 2 billion.
According to an Auditor’s report, the overall repayment along with profits has been made.
The TFC-5 raised by Mobilink was redeemed as per its plan in April 2016. It was issued in April 2012 for the period of four years mainly through JS Bank.
Subsequent to investment in TFC, JS Bank’s Group found it lucrative to work with Mobilink as it further decided to invest Rs 4 billion in the telecom sector and technology in the near future.
Mobilink had floated this TFC at a time when KIBOR stood at more than 12 percent. It attracted a number of subscribers/ investors offering a handsome profit rate of more than KIBOR plus 200 bps.
Raising the capital through financial instrument, Mobilink invested on the upgradation of its network primarily for the deployment of 3G infrastructure in the past couple of years.
Mobilink has been successful in raising funds through TFC and Sukuk (Islamic financial instrument) and this is likely to continue in the future. This is an alternate way of Foreign Direct Investment in which a company generates funds through local market to expand its operations and business.
As the KIBOR rate stands at more than 6 percent now, operators could float TFC for generating funds to expand their network in future without bringing in FDI from headquarters.