MTN lends R2.6bn to tower group

The New Age (Gauteng) - - BUSINESS -

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.

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