By Michael Eboh & Favour Agbi
Telecommunication infrastructure provider, IHS Nigeria Plc has announced plans to raise about N32 billion ($200 million) from the capital market to finance its expansion across the African continent within the next one year.
The company is also considering a secondary listing on an overseas stock exchange in addition to its current listing on the Nigerian Stock Exchange, NSE.
To this end, the company has appointed Citibank to raise the extra equity it needs to expand its operation beyond Nigeria.
According to Chief Executive of the company, Issam Darwish, the company said it intends to use proceeds from the fund to increase the number of its mobile towers from 850 to about 2,000.
He also said it will construct new mobile sites in Uganda, Rwanda, Democratic Republic of Congo, Kenya, Ivory Coast and South Sudan.
He disclosed that some of the funds would also be used to buy towers which are being sold by companies such as France Telecom in Uganda.
Darwish puts the total value of the African tower market at around $50 billion and estimates that Africa requires at least another 50,000 masts as demand for voice and traffic data increases on the continent.
He said, “Voice penetration is about 60 per cent across Africa but real penetration is about 10 to 15 per cent less than that.
“So there will be a massive growth in voice traffic that will need building to ensure more capacity, while data use is almost non-existent and will grow rapidly.”
The company, had earlier in the year, entered into an agreement with Investec Asset Management, via its African private equity funds; the International Finance Corporation, IFC and the Netherlands Finance Development Company (FMO) for a N12.64 billion (US$79 million) equity investment in IHS.
The company informed the capital market community that the investment which is subject to regulatory approvals will help the company build and acquire mobile phone towers in sub-Saharan Africa, thereby increasing mobile phone coverage and reducing communication cost in the region.
Darwish assured investors that the company is dedicated to partnering with operators and investors across the African continent to add the IFC, FMO and Investec Asset Management’s private equity fund to its shareholders’ base.
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IHS to raise N32bn for expansion