South Africa’s MTN Reaches $410 Million Towers Deal With IHS
South Africa’s MTN Reaches $410 Million Towers Deal With IHS
MTN Group Ltd. and IHS Holdings Ltd. agreed a 6.4 billion rand ($410 million) tower-deal in South Africa, according to a statement.
The sale and-lease back transaction covers 5,709 sites, as well as power and related services to MTN’s entire tower portfolio in the country, the telecoms provider said. The money from the sale will be reinvested in securing additional spectrum in South Africa, and also give it more flexibility with its finances.
The deal provides IHS an entry into Africa’s most developed economy, and additional revenue of about $220 million in the first year of operations, it said. The transaction will see IHS become the largest independent tower operator in South Africa.
Bloomberg News reported the deal was in advanced discussions last month.
Africa-focused telecom firms are increasingly looking to extract more value out of their continent-wide operations and business units. MTN’s cross-town rival Vodacom said last week it plans to separate its telecoms towers portfolio into a new unit, while South Africa’s third-largest operator Telkom plans to list its towers and masts business before March 2022.
MTN shares have surged 161% in 2021 and surpassed competitor, Vodacom’s market capitalization along the way.
MTN has engaged in an extensive asset realization program in recent years, that also included selling down some of its stake when IHS listed in New York last month. The group is further working on a potential spin-off of its financial-technology business valued at 87 billion rand ($5.6 billion).
The South African towers transaction is expected to close in the first quarter of 2022.
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