MTN Plans 30% IHS Nigeria Sell-Down to Raise Up to $1.1bn

MTN Group is seeking Nigerian investors to acquire up to 30 per cent stake in IHS Nigeria, to enable the group conclude the acquisition of IHS Holding Limited that is expected to reach between $900 million and $1.1 billion.

Bloomberg, which reported the development, cited people familiar with the matter who asked not to be identified because the details are private.

Bloomberg reported that the proposed sale of the 30 per cent stake could generate between $900 million and $1.1 billion for MTN.

The move by MTN Group to seek local investment from Nigerian investors in IHS Nigeria, is sequel to the conditional approval given recently by the Federal Competition and Consumer Protection Commission (FCCPC) to the MTN Group for the acquisition of IHS Nigeria.

FCCPC had given conditional approval to MTN to sell down up to 30 per cent of the Nigerian component of the IHS business to local investors at market prices over time.

MTN Group Chief Executive Officer, Ralph Mupita, confirmed that proceeds from the sell-down would be used to reduce debt linked to the IHS transaction, while declining to provide details on the potential value of the stake.

“Proceeds from any sell-down would be used to pay down IHS-related debt. The deal would be done on market-oriented valuation basis,” Mupita said in an interview when asked about the deal.

IHS operates about 29,000 telecom towers across Africa, with Nigeria and South Africa representing its largest markets. In Nigeria, the tower company operates about 18,000 mobile-phone towers, according to people cited by Bloomberg.

IHS, which started operations in 2001 from Nigeria, and was founded by Sam Darwish, grew to become one of the largest independent owners, operators and developers of shared communications infrastructure in the world.

MTN and IHS have maintained a longstanding relationship in the telecoms’ infrastructure market, with MTN selling thousands of its telecom towers to IHS through sale-and-leaseback arrangements over the years.