iQSTEL raises $3M in debt to fund West African telecom acquisition
What's the deal? iQSTELDealroom has a profile for this one. Try Dealroom → has closed the first financing tranche for its planned acquisition of a 51% controlling stake in Ultranet Telecom Group, a profitable West African telecom platform. The Nasdaq-listed company raised up to $3 million in two-year senior secured, non-convertible promissory notes, paired with pre-funded warrants for up to 420,000 shares.
Why debt? The notes carry no conversion feature. "We funded this step with two-year non-convertible debt, so shareholders are not taking on conversion dilution to move Ultranet forward," said chief executive officer Leandro Iglesias.
What's the endgame? Ultranet, based in Accra, Ghana, provides international telecom and messaging services across six markets — Nigeria, Côte d'Ivoire, Ghana, Burkina Faso, Mali, and Senegal — backed by exclusive SMS gateway agreements with African mobile operators. iQSTEL expects the acquisition to make it cash-flow positive on a consolidated basis and lift it to roughly $9 million in annualised adjusted EBITDA.
By the numbers: Ultranet's 2025 revenue grew 30% to $130.9 million from $100.9 million a year earlier, generating $5.0 million in EBITDA and $4.6 million in net income. The full $17.6 million purchase price includes $7 million in initial cash and up to $10.6 million tied to Ultranet's future earnings.
What could go wrong? The deal has not closed; iQSTEL is now targeting a first-quarter 2027 completion, having slipped from an earlier Q3 2026 goal. The new notes carry 18% annual interest with scheduled principal repayments, and the cash-flow claim remains a management expectation rather than an established outcome.
The signal: iQSTEL is betting on scale in Sub-Saharan Africa, one of the world's fastest-growing mobile regions, where SMS still carries mobile-money confirmations and identity-verification codes. Choosing secured debt over equity avoids dilution, but it loads the balance sheet with a costly repayment burden before the acquisition is even finalised.
Read more: smb.magnoliastatelive.com
Image credit: Generated with Gemini
