Afrigather IHS Towers, Africa’s largest telecom tower firm, has secured a brand new $439 million mortgage to handle forex dangers and help its operations throughout a number of areas. Virtually half of the mortgage is in South African Rand, whereas the opposite half is in USD ($255 million).
IHS Towers will use the mortgage to repay a $430 million debt from October 2022 which was set to mature in 2025. By refinancing early, the corporate might profit from higher phrases, doubtlessly decreasing curiosity prices and increasing its debt compensation timeline. This transaction is described as “leverage impartial,” that means it received’t considerably change the corporate’s debt-to-equity ratio.
Each elements of the mortgage include a 4.50% rate of interest. The US greenback portion is tied to the three-month SOFR (Secured In a single day Financing Fee), and the South African Rand portion is tied to the three-month JIBAR (Johannesburg Interbank Common Fee). These charges fluctuate with the market, which might affect the general price of borrowing for IHS Towers.
The complete quantity is a bullet-term mortgage, that means IHS will repay the total quantity on the finish of the time period somewhat than making periodic funds. This provides the corporate speedy entry to the funds, but it surely should make a lump-sum compensation after 5 years.
“It is a group-level financing and subsequently has no direct affect on any specific market,” an IHS Towers spokesperson informed TechCabal.
The corporate laid off 100 workers in mid-2024 as devaluation in its major market, Nigeria, squeezed its margins. Its losses ballooned to $1.9 billion in 2023, up from $469 million in 2022.
IHS has been seeking to cut back its greenback publicity. It renegotiated tower contracts with main shoppers akin to MTN Nigeria, amassing charges in USD and native forex in addition to including a part for diesel prices.
