MTN Group Limited, Africa’s largest telecom service provider led by South African executive Ralph Mupita, has completed the sale of its passive tower infrastructure in South Africa to IHS Holding, a leading independent owner, operator, and developer of shared telecom infrastructure.
“With the regulatory approvals and all conditions precedent to the deal finalized, we are pleased to have IHS bring global capabilities to our South Africa network,” MTN Group President and CEO Ralph Mupita said. “Additionally, with this deal, we continue to deliver on our Asset Realization Program, strengthening the balance sheet and improving returns.”
The move comes nearly seven months after the leading telecom services provider announced its decision to finalize key agreements on the sale of 5,701 tower infrastructure to IHS Holding in a R6.4-billion ($415.1 million) transaction.
According to the terms of the transaction, IHS Holding, a Nigerian telecom infrastructure firm led by U.S.-Nigerian businessman Sam Darwish, will provide power management services to MTN South Africa on about 13,000 sites across South Africa, including the acquisition portfolio.
IHS will now own 70 percent of the South African tower business, with a B-BBEE consortium owning the remaining 30 percent.
The acquired assets, as well as the provision of power management services throughout MTN SA’s portfolio, are expected to generate $192 million in revenue and $85 million in adjusted earnings before interest, taxes, depreciation, and amortization in the first full year of operations.
This is expected to strengthen IHS’s earnings potential after it posted a stellar performance in the first quarter of 2022, following a 26.1-million loss at the end of its 2021 fiscal year.
The transaction aligns with IHS Towers’ existing service offerings in other African markets, the management said, and will be delivered to the acquired sites and other third-party sites where MTN SA has a presence.
While commenting on the transaction, Darwish, the chairman and CEO of IHS Holding, said the deal is an important milestone in IHS’ growth story and marks the company’s entry into Africa’s most industrialized economy as South Africa’s largest independent tower operator.
