MTN Group, Africa’s biggest telecommunication operator, said on Thursday it had assigned a $231 million shareholder loan to phone tower group, IHS Holding Ltd, impacting its 2017 profits.
MTN, which returned to profit in the first half of its financial year in the absence of one-off charges related to a $1.1 billion Nigerian fine, said the assignment of the loan to IHS will lead to a loss of 2.8 billion rand ($228 million) on transfer of the carrying value of the loan.
The loss on transfer will impact headline earnings per share (HEPS) for 2017, the main profit measure in South Africa that strips out certain one-off items, but not earnings before interest, tax, depreciation and amortisation (EBITDA), the firm said.
MTN said the loan, which is due in 2024/2025, will allow its Nigerian unit to continue to invest in its network and simplify MTN’s interests in IHS.
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“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 in a statement.
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.
IHS Towers is the largest mobile telecommunications infrastructure provider in Africa, Europe and the Middle East by tower count and the third largest independent multinational tower company globally.
Founded by Issam Darwish in Lagos, Nigeria, in 2001, the company specializes in building towers and managing sites for mobile network operators (MNOs).
The tower company operates three business models: building its own tower sites and leasing them to operators; acquiring existing MNO sites and leasing tower space back; taking over the management of operators networks with an agreement to lease the sites to other operators.
Some of the MNOs that it works with include MTN, Orange, Airtel, 9mobile, ntel and Millicom.
