- IHS Towers, a telecommunications tower giant, has reportedly secured a $439 million loan in South African Rand and USD to manage currency risks and support its operations across multiple regions.
- Per reports, nearly half of the loan is in South African Rand, while the other half is in USD ($255 million). It will use the loan to pay off a $430 million debt from October 2022, ahead of its maturity in 2025.
- Additionally, both parts of the loan come with a 4.50% interest rate. The US dollar portion is tied to the three-month SOFR (Secured Overnight Financing Rate), and the South African Rand portion is tied to the three-month JIBAR (Johannesburg Interbank Average Rate).
This new financing comes two months after IHS considered selling off its businesses in Rwanda and Zambia in August 2024, with plans to use some of the proceeds to pay down its debts.
Moreover, IHS will repay the full amount at the end of the term rather than making periodic payments, giving it immediate access to the funds. However, it must make a significant repayment after five years.
By refinancing early, IHS may secure better terms, potentially lowering interest costs and extending its debt repayment due date. However, the transaction is said to be "leverage neutral," implying no significant change to the company’s debt-to-equity ratio.
Meanwhile, while the company operates over 40,000 towers across Africa, Latin America, and the Middle East, the financing is not tied to any specific market. An IHS spokesperson told TechCabal, “This is a group-level financing and therefore has no direct impact on any particular market.”
This move follows IHS laying off 100 employees in August 2024, after suffering a massive $1.9 billion loss in 2023. The decision impacted several departments, but majorly affected senior staff and the team involved in network surveillance.
The $1.9 billion loss in 2023 was attributed to the devaluation of the Nigerian Naira and subsequent foreign exchange (FX) losses, as well as the layoff, which was a result of economic challenges and staff underperformance.
However, in Nigeria, MTN Nigeria has renegotiated the renewal and extension of a tower lease agreement with IHS's subsidiary in Nigeria, covering over 13,500 tenancy contracts through December 2032. It will also renew 1,430 MTN Nigeria tenancies.