Africa’s largest telecommunications company, IHS Towers has reportedly gotten a $439 million loan to manage currency risks and support its operations across multiple regions. According to reports, virtually half of the loan comes in South African Rand, while the other half is in USD ($255 million).
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). These rates fluctuate with the volatility of the market, a development that could impact the overall cost of borrowing for IHS Towers.
The entire amount is a bullet-term loan.This means IHS will repay the full amount at the end of the term rather than making periodic payments. This maneuver gives the company immediate access to the funds, but it must make a lump-sum repayment after five years.
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.
By refinancing early, the company positions itself to secure better terms, potentially lower interest costs and extend 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.
“This is a group-level financing and therefore has no direct impact on any particular market.” An IHS spokesperson told TechCabal.
This move comes after IHS laid off 100 employees in August 2024 on the heels of 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 said to be a direct fallout from 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.
