IHS Towers has finalised a transaction with MTN South Africa to buy 5,709 of the mobile operator’s towers for the value of R6.4 billion. MTN will then lease these towers from IHS to run their network, 4,000 of which are greenfield sites and 1,700 are rooftop sites.
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MTN will use the proceeds from the sale to reinvest into strategic growth initiatives, which include securing high demand spectrum frequencies, and providing MTN with additional balance sheet flexibility. In the statement to the JSE SENS service, MTN said that the deal is only for its passive infrastructure (the physical towers), and that the agreement was reached following a lengthy competitive process.
“The transaction will also include the outsourcing of power and related services across the entire MTN SA site footprint of approximately 12,800 — thus incorporating an additional 7,100 third-party sites,” the company said in the statement.
MTN said the transaction aims to ensure:
- Limited financial impact on MTN SA’s current running costs versus leaseback costs
- Improved network performance, including improved power management
- Flexibility to maximise the benefit of MTN SA’s active network sharing, including current agreements in place with Cell C and Telkom
- Local currency exposure, that is, all payments in rand
- A minimum 30% Broad-based Black Economic Empowerment (BBBEE) ownership
- Cooperation between MTN and IHS to work towards the group’s emissions targets aligned to net-zero by 2040 for scope 3 emissions
“Completion of the transaction is subject to certain conditions precedent, including regulatory approvals, and is expected to close in Q1 2022,” MTN said.
MTN currently has a 29% stake in IHS Towers, who launched an initial public offering (IPO) on the New York Stock Exchange in October this year. MTN’s stake was valued at about R30.5 billion, but a recent dip in die stock price means it currently sits at about R20.8 billion.
