Nigerian phone tower group, IHS, has raised $2 billion in equity and $600 million in debt in what the firm described as the biggest equity fund raising by an African company this decade.
IHS, the continent’s largest tower company, will use the money to finance infrastructure spending and recently agreed acquisitions, a statement from the company said on Monday.
It said the equity funding was from new and existing shareholders, but did not provide further details.
The loan facility was split into two parts: a seven-year tranche of $500 million denominated in U.S. dollars and an eight-year tranche of $100 million.Ecobank, Standard Chartered, Standard Bank, Investec and the World Bank’s International Finance Corporation (IFC) participated in the loan, IHS chief executive Issam Darwish told Reuters.
“This is the largest equity raising by a private entity for the past 7-8 years in Africa — you’ve had mining, banks and now telecom infrastructure as a standalone sector is commanding this much interest from the international markets,” said Darwish.
“This sends the right signal, it’s saying the international investor community believes in Africa and they’re putting a substantial amount of money behind that.
”Building and maintaining mobile communications towers in Africa is typically more expensive than in other regions because of security costs and electricity shortages, while revenue per user is often lower. That had prompted many mobile operators to sell or lease towers to specialist companies such as IHS, which can reduce building and maintenance costs by hosting multiple tenants — mobile operators and Internet providers — on the same towers.In September, South Africa’s MTN agreed to sell 9,151 mobile towers in Nigeria to a new joint venture with IHS in a deal MTN said would cut its costs and boost its call and data capacity in Africa’s most populous country.