MTN lends R2.6bn to tower group
MTN Group, Africa’s biggest mobile phone operator, said yesterday it had assigned a $231m (R2.6bn) shareholder loan to phone tower group IHS Holding, affecting its 2017 profits. MTN’s share price dropped 2% to R133 on the news.
MTN, which returned to profit in the first half of its financial year in the absence of oneoff charges related to a $1.1bn Nigerian fine, said the assignment of the loan to IHS would lead to a loss of R2.8bn on transfer of the carrying value of the loan.
The loss on transfer would impact headline earnings per share (HEPS) for this year, the main profit measure in South Africa that strips out certain oneoff items, but not earnings before interest, tax, depreciation and amortisation (EBITDA), the firm said.
MTN said the loan, which is due in 202425, will allow its Nigerian unit to continue to invest in its network and simplify MTN’s interests in IHS.
“The agreement will enable MTN and IHS to mutually benefit from continued investment and commitment to the rollout of broadband and data services in Nigeria,” MTN said.
MTN formed a joint venture partnership with specialist tower company IHS in 2014 to own and operate MTN’s transmitter towers in Nigeria.
IHS has operations in Nigeria, Cameroon, Cote d’Ivoire, Rwanda and Zambia. – Reuters
MONEY MATTERS: MTN sees its loan to IHS as a prudent investment.