IHS Towers, a major player in the telecommunications tower industry, has secured a $439 million loan to manage currency risks and bolster operations across its markets. The loan is split between South African Rand and USD, with $255 million in the latter currency. This financing move will allow IHS to pay off a $430 million debt, initially due for maturity in 2025, two years ahead of schedule.
Both portions of the loan come with a 4.50% interest rate. The USD portion is linked to the three-month Secured Overnight Financing Rate (SOFR), while the South African Rand portion is tied to the Johannesburg Interbank Average Rate (JIBAR). By opting for early refinancing, IHS could potentially secure better terms, extend its debt repayment timeline, and reduce interest costs. However, this deal is described as “leverage neutral,” meaning it won’t significantly impact the company’s debt-to-equity ratio.
Unlike typical loans, where periodic payments are required, IHS Towers will repay the entire loan amount at the end of the term. This will give it immediate access to the full funds. Although the debt is not tied to any specific region, the company’s operations cover 40,000 towers across Africa, Latin America, and the Middle East.
IHS Recent Challenges
This financing comes just two months after IHS considered selling its operations in Rwanda and Zambia to reduce its debt load. The company also faced challenges in 2023, suffering a massive $1.9 billion loss due to the devaluation of the Nigerian Naira and foreign exchange losses. Additionally, in August 2024, IHS laid off 100 employees, primarily affecting senior staff and its network surveillance team.
Despite these challenges, there have been positive developments. MTN Nigeria recently renegotiated and extended its tower lease agreement with IHS, covering over 13,500 tenancy contracts through December 2032. This agreement includes the renewal of 1,430 MTN Nigeria tenancies, ensuring long-term stability for IHS’s Nigerian operations.
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This loan move is part of IHS’s broader strategy to navigate financial hurdles while positioning itself for future growth across its global markets.
