File image: IOL

CAPE TOWN - An initial public offering (IPO) of the IHS towers could result in MTN selling a stake valued at about R27bn ($2.3bn), Bloomberg reported.

IHS Towers, owned by French investment firm Wendel SA and Goldman Sachs & Co, as well as MTN is planning an IPO in New York, people familiar with the matter said last year according to Bloomberg.  

Johannesburg-based MTN owns about 29% of the IHS towers. Chief Financial Officer Ralph Mupita told Bloomberg that if the tower operator goes ahead with the share sale and the valuation is appropriate, MTN will look to sell out. 

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“It is not strategic to lock up so much capital,” the CFO said. While MTN’s stake in IHS Towers is important, its been earmarked by the company as an asset for sale, he said.

According to Bloomberg, IHS, Helios Towers Africa and Eaton Towers are all looking to take advantage of high industry valuations to sell shares and fund expansion, the people familiar with the situation said in November. 

Helios confirmed the plans earlier this month, saying it would seek an IPO in London and Johannesburg and expects at least 25% of its shares will be freely traded after the sale. IHS Towers declined to comment.

MTN, Africa’s largest mobile-phone company by sales, is planning to cut its debt, Mupita told Bloomberg. 

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Borrowings rose to R57bn ($4.8bn) in 2017 from R52bn the previous year.

The shares rose 1.2% to R133.60 as of 15:30 in Johannesburg, valuing the company at R252bn.

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