Wendel raises stake in African towers firm

Lenders have provided almost half a billion dollars to fund further investment in African telecoms towers by Emerging Capital Partners-owned IHS.

The International Finance Corporation and a lending syndicate led by Ecobank have supplied $480 million in debt financing to telecom towers operator IHS as part of a new funding round. 

The IFC provided $280 million, while the Ecobank syndicate provided $200 million, according to a statement. 

In addition to the debt financing, a host of firms provided additional equity to fund the company's expansion. 

Paris-listed investment firm Wendel invested an additional $100 million in IHS Holding bringing its stake in the business to almost 35 percent and its total invested capital to $276 million. Wendel’s investment was made through its Oranje-Nassau Developpement subsidiary. 

The capital increase was also backed by existing shareholders Emerging Capital Partners, a pan-African and international private equity firm, and South Africa’s Investec Asset Management Africa Private Equity and Public Funds. An unnamed Asian sovereign wealth fund also took part. 

Nigeria-headquartered IHS, which was founded in 2001, describes itself as “Africa’s leading independent mobile telecommunications infrastructure provider”. It has 8,500 telecom towers in its portfolio and operations in Nigeria, Cameroon and Cote d’Ivoire. 

The firm provides telecommunications tower infrastructure to mobile network operators in Africa including MTN and Orange. It has more than 1,000 employees and builds, leases and manages telecom towers on its own and on behalf of third parties. It is unlisted, though one of its subsidiaries – IHS Nigeria – is listed on the Nigerian Stock Exchange.

When Wendel invested $125 million in IHS in October last year – taking its holding above 25 percent – it said that the “very fast growth” of Africa provides “attractive expansion prospects to a long-term investor”. 

The African telecom industry is predicted to grow at around 10 percent annually over the coming years, the firm said. The region is also touted to see an increasing mobile penetration rate, which is currently among the lowest in the world at 62 percent of the total population.