MTN may sell 27b rand stake in top African tower company

[JOHANNESBOURG] MTN Group Ltd could cash in from an initial public offering of Africa's largest telecommunication-towers company by selling a stake valued by the wireless carrier at about 27 billion rand (S$2.99 billion).

IHS Towers, of which Johannesburg-based MTN owns about 29 per cent, is planning an IPO in New York, people familiar with the matter said last year. If the tower operator goes ahead with the share sale and the valuation is appropriate, MTN will look to sell out, Chief Financial Officer Ralph Mupita said in an interview.

"It is not strategic to lock up so much capital," the CFO said. While MTN's stake in IHS Towers is important, its been earmarked by the company as an asset for sale, he said.

IHS, Helios Towers Africa LLP and Eaton Towers Ltd are all looking to take advantage of high industry valuations to sell shares and fund expansion, the people familiar with the situation said in November. Helios confirmed the plans earlier this month, saying it would seek an IPO in London and Johannesburg and expects at least 25 per cent of its shares will be freely traded after the sale. IHS Towers declined to comment.

MTN, Africa's largest mobile-phone company by sales, is planning to cut its debt, Mupita said. Borrowings rose to 57 billion rand in 2017 from 52 billion rand the previous year. The shares closed 1.1 per cent higher at 133.40 rand in Johannesburg on Monday, valuing the company at 251 billion rand.

IHS is owned by French investment firm Wendel SA and Goldman Sachs & Co as well as MTN.

BLOOMBERG