In a statement, MTN Group Ltd. and IHS Holdings Ltd. announced a $410 million tower deal in South Africa.
Besides power and related services, the sale-and-leaseback agreement covers 5,709 tower sites owned by MTN in the country. The proceeds of the sale will be invested in securing additional spectrum in South Africa, as well as giving the company more flexibility with its finances.
In the first year of operations, IHS expects to generate about $220 million in revenue from Africa’s most developed economy, it said. With the deal, IHS will become South Africa’s largest independent tower operator.
Telecom companies with a focus on Africa are increasingly seeking to extract value from their continent-wide operations. South Africa’s third-largest operator Telkom plans to list its towers and masts business before March 2022. MTN’s cross-town rival Vodacom said it plans to separate its towers business into a new unit.
The share price of MTN has soared 161% in 2021, surpassing the market capitalization of competitor Vodacom.
It also sold down some IHS stakes when IHS listed in New York last month as part of its extensive asset realization program. Further efforts are being made to spin off the group’s financial-technology business, which is worth $5.6 billion.
A deal to purchase towers in South Africa will close in the first quarter of 2022.