Helios Towers Nigeria (HTN Towers) aims to raise about US$125m in an IPO on the London Stock Exchange to help fund growth plans. The company hopes to capitalise on rising demand for telecoms infrastructure in Africa’s largest economy.
Helios Towers Nigeria (HTN Towers) aims to raise about US$125m in an IPO on the London Stock Exchange to help fund growth plans.
HTN, an affiliate of Helios Towers Africa, said in a statement that it intends to float 50% to 60% of its shares, with an over-allotment option of up to 15% of the total offer size.
Institutional book-building has begun and final pricing and commencement of trading is expected in early November.
BofA Merrill Lynch and Citigroup are joint global coordinators, joint bookrunners and underwriters for the IPO. Investec and the Standard Bank of South Africa are joint bookrunners and underwriters, while Exotix Partners and Peel Hunt are co-lead managers and underwriters.
HTN said about US$80m of the proceeds would be used to build hybrid, solar-equipped towers, US$13m to deploy hybrid and solar technologies on additional sites, and US$12m to invest in towers managed under an agreement with SWAP Technologies and pay creditors pursuant to this agreement.
The balance would be used for working capital and to pay shareholder Helios Towers Mauritius Holdings at least US$40m in connection with the reorganisation completed in preparation for the IPO.
HTN chairman Pierre Danon said the listing would mark the “next logical step” in the company’s growth strategy after its recent rebranding.
“We are ambitious with our pan-African growth aspirations, which we will achieve through best practice operations, sound corporate governance and trust.”
CEO Inder Bajaj (pictured) added: “There is a significant opportunity for us to continue to grow the business in order to meet the significant demand for the tower infrastructure necessary to enable the rapidly increasing demand for mobile subscription across Africa.”
Founded in 2007, HTN claims to have had a tower portfolio of 1,203 sites in 35 of Nigeria’s 36 states as of 30 June 2015, mostly in densely-populated areas. In July, the company entered into an agreement to manage up to 702 additional towers owned by SWAP.
The company highlighted its longstanding relationships with mobile network operators MTN, Airtel and Etisalat, which it said collectively represent 79% of the market, adding that its lease agreements are typically for five to 10 years.
As of 30 June, HTN said its future contracted revenues under leasing agreements totalled US$336.1m, not including projected rate increases.
HTN reported revenues of US$73.3m and EBITDA of US$31.7m for the year ended 31 December 2014, with an EBITDA margin of 43%.
In addition to building new towers, the company aims to increase co-location on existing sites, revive dormant towers, improve operational efficiencies and pursue managed service agreements, sale-and-leaseback deals and acquisitions in Nigeria and wider Africa.
HTN said it believes the Nigerian tower leasing industry has strong potential for continued growth as a result of rising demand for telecoms infrastructure.
At present, Nigeria – Africa’s largest economy – has relatively underdeveloped tower infrastructure, leading to network congestion and pressure from consumers and regulators to improve service quality.
Consultancy Hardiman Telecommunications estimates that total demand for point of sale (POS) tenancies in Nigeria will increase from 28,000 in 2014 to 53,000 in 2020.
