Ecobank Capital , the investment banking division of pan-African bank Ecobank , has raised a US$202mn syndicated credit facility for IHS Towers , a leading tower infrastructure firm on the continent. This development is a major boost for IHS Towers in its aggressive expansion strategy, but, perhaps more significantly, it is another testament to the growing investor confidence in independent tower sharing services in Africa.
|Room For Growth|
|IHS Towers' Portfolio, October 2012|
The credit facility will primarily be used to fund part of IHS Towers' acquisition of 1,758 mobile network towers from MTN Group subsidiaries in Cameroon and Côte d'Ivoire in October 2012 ( see our online service, October 16 2012, 'MTN Reaches Tower Deal With IHS'). The facility, which was reportedly oversubscribed, has UBA, Orabank, Bank of Africa and Banque Nationale d'Investissement as participating banks. The proceeds are denominated in local currencies XOF for Côte d'Ivoire and XAF for Cameroon. The Ecobank syndicated credit facility comes after IHS Towers secured a US$125mn equity investment for a 25% stake from Oranje-Nassau Development (OND), a subsidiary of European investment firm Wendel ( see 'Wendel Buys Into IHS', October 31).
IHS Towers' funding deals are a major boost to its operations and aggressive expansion plans. The firm owned 2,951 sites and had another 2,659 under management as of October 2012. IHS Towers plans to double its operations in 2013 and expects to have more than 20,000 towers under ownership or management by 2015, up from its current portfolio of 5,610.
BMI notes that the Ecobank-IHS deal is in line with our positive outlook for independent tower sharing services in Africa ( see 'Tower Sale And Leaseback Deals To Continue In 2013', November 23) and is a testament to the growing investor confidence in the budding sector. It is estimated that network operators in Africa have a combined towers portfolio of around 170,000, leaving a deficit of more than 300,000 for optimal services. While independent tower firms are primed to drive the buildout of new towers across the region, they will, in the meantime, focus on tower sale and leaseback deals with operators looking to outsource their non-core operations as a means of improving cost efficiencies. Presently, IHS Towers, along with Helios Towers, American Tower Corp (ATC), Eaton Towers and Swap Technologies are the leading independent tower sharing firms in Africa.