By Dipo Olowookere
Leading mobile communications infrastructure company, IHS Holding Ltd, has secured a credit facility of $231 million from South African GSM service provider, MTN Group.
The facility was given to HIS Holding in form of a shareholder loan.
MTN Group is Africa’s biggest mobile phone operator and it explained on Thursday that the loan will lead to a loss of $228 million on transfer, which will impact headline earnings per share (HEPS) for 2017, the main profit measure in South Africa that strips out certain one-off items, but not earnings before interest, tax, depreciation and amortisation (EBITDA).
IHS Holding Ltd has operations in Nigeria, Cameroon, Cote d‘Ivoire, Rwanda and Zambia and MTN said further that the loan, which is due in 2024/2025, will allow its Nigerian unit to continue to invest in its network and simplify MTN’s interests in IHS.
MTN formed a joint venture partnership with specialist tower company IHS in 2014 to own and operate MTN’s transmitter towers in Nigeria.
“The agreement allows MTN Nigeria to continue to invest in its network more efficiently, and further simplifies MTN’s interests in IHS.
“The agreement will enable MTN and IHS to mutually benefit from continued investment and commitment to the rollout of broadband and data services in Nigeria,” MTN said in a statement on Thursday.
MTN explained that, “The shareholder loan arose as part of MTN Nigeria’s tower transactions whereby MTN Nigeria sold a portfolio of towers to INT Towers (Nigeria) (INT) in 2014 and 2015 which, through Interco, was 51 percent owned by MTN Nigeria Towers SPV B.V. and 49 percent by IHS. At the time of the original transaction MTN also acquired an approximate 15 percent interest in IHS.
“When forming INT, MTN Group (through MTN Nigeria Towers SPV B.V.) as well as IHS, provided proportionate shareholder loans to INT. These loans were subordinated and due for repayment in 2024 and 2025 with interest capitalised until 2 years prior to repayment.”
It further said, “In February 2017, MTN Group exchanged its interest in Nigeria Tower Interco B.V. (Interco) resulting in MTN Group having an economic interest of 29 percent in IHS and no longer being a shareholder of Interco.
“MTN Group realised a profit of approximately R6bn on this transaction recorded in its 2017 first half results to phone tower group, IHS Holding Ltd, impacting its 2017 profits.”
more recommended stories
CPN Accredits NCDMB’s ICT Centre in Akwa-Ibom as Training Begins
By Modupe Gbadeyanka The Information and.
Tinubu Offers N5m to Young Tech Entrepreneurs
By Dipo Olowookere Serial entrepreneur and.
Acer Unveils Always-on 4G LTE Windows 10 Laptop
By Modupe Gbadeyanka According to Strategy.
Cassava Fintech, Comviva win 2018 East Africa Com Award
By Dipo Olowookere Two joint winners.