MTN’s tower firm prepares to list

• Nigerian network in which SA operator holds 29% stake targets New York listing

IHS Towers, a Nigeria-born network tower company, has started the process for a stock market flotation in the US, putting MTN — which holds about a third of the company — on the path for a bumper payday. IHS’s long-awaited listing is a key part of MTN’s plan to reduce its debt and streamline its business.

IHS Towers, a Nigerian network tower company, has started the process for a stock market flotation in the US, putting MTN

— which holds about a third of the company — on the path for a bumper payday.

On Friday, MTN said IHS, which runs the cellphone network infrastructure that beams wireless signals and is considered a neighbourhood eyesore, had filed a registration statement with the US Securities and Exchange Commission relating to a potential initial public offering (IPO) on the New York Stock Exchange.

Since 2019, Africa’s largest mobile operator by subscribers has been working to reduce its debt and streamline its business. As part of the mission, the company set out to raise R25bn from the sale of noncore assets.

IHS and its long-awaited IPO is a key part of the plan that includes pulling out of unstable, war-torn countries in the Middle East to focus on lucrative African markets, where the company is building new streams of income in financial services, gaming and music streaming.

Mobile phone companies have been offloading towers and masts to infrastructure companies and renting back the space, allowing them to raise money to expand their networks and wipe out maintenance costs.

MTN holds a 29% interest in IHS Towers. By June, the company estimated the value of that investment at R30.5bn, reflecting investor appetite for telecoms infrastructure assets, which offer a reliable income stream in a world of surging internet data consumption.

At the time, MTN said demand for infrastructure assets remained strong and conditions in the US equity market were favourable for a listing. For now, it said “the timing, number of shares to be offered and price range of the proposed offering have not yet been determined”.

The launch of the offering is subject to regulatory and governance approvals, as well as “conducive market conditions”, the group said.

MTN, worth R238.7bn, has made progress in its fundraising efforts. Recently it sold its 20% stake in telecoms operator Belgacom International Carrier Services for R1.8bn.

After the disposal of its shares in travel technology company Amadeus and online travel booking platform Travelstart, and of the American Tower Company (ATC) loan of R2.1bn earlier in 2019, MTN sold off its 49% holding in the Ghana and Uganda Tower companies to a subsidiary of ATC. The group received R8.9bn from that deal.

While assets earmarked for sale remain largely unchanged, the group added its portfolio of 12,700 network towers in SA to the mix earlier in 2021.

MTN, which itself has been listed for almost 20 years, has had a good run in the market this year. It closed more than 3% higher on Friday, bringing gains so far this year to 110%.

THE LAUNCH OF THE OFFERING IS SUBJECT TO REGULATORY AND GOVERNANCE APPROVALS