Helios Towers Africa is planning an April listing on the London and Johannesburg stock exchanges in a move set to value the telecoms tower operator at around £2 billion ($2.8 billion; €2.2 billion), including debt, a source familiar with the listing told Infrastructure Investor.
Helios owns and operates 6,519 towers in Tanzania, the Democratic Republic of Congo, the Republic of Congo and Ghana. In the first three markets, it owns and operates more tower sites than any other operator and is a strong player in Ghana, where 77 percent of its towers are in urban locations. In fact, some 64 percent of Helios’s total portfolio is located in urban areas.
The IPO announcement comes on the back of a strong set of results, with Helios posting $345 million in revenue and $146 million in adjusted earnings before interest, tax, depreciation and amortisation as at 31 December 2017. Those figures represent respective growth of 32 percent and 65 percent in relation to the year ended 31 December 2015, Helios said. The firm also has $600 million in debt.
Importantly, Helios also has strong growth prospects. As at 31 December, its ratio of tenants to sites stood at 1.9 times, but in its IPO prospectus Helios stated that 78 percent of its sites are ready for more leases, “with capacity for a tenancy ratio of circa 3.6 times in aggregate, at minimal incremental cost”. That leaves the company well-placed to capitalise on an average 37.6 percent increase in mobile subscribers in its markets by 2023.
Its sites and tenancy rates have grown by 9.6 percent and 13.9 percent respectively since 31 December 2015.
“Helios Towers is well-positioned in one of the most exciting mobile telecommunications markets in the world: Sub-Saharan Africa,” commented Helios Towers chief executive Kash Pandya. “Our contracted revenues of $3.1 billion without taking into account any escalation fees (as at 31 December 2017) and long-term contracts with leading, at or near investment-grade rated customers, provide us with a strong and predictable growth model.”
Following the April listing, about 25 percent of Helios’s capital is expected to have a free float. The IPO will also allow existing shareholders – including Soros Fund Management, Helios Investment Partners, Albright Capital Management, the IFC and Bharti Airtel, among others – to partially realise their investment.
Helios Towers Africa was founded in 2009 and currently employs 370 staff. It is one of the three biggest African telecoms tower operators seeking a listing, the other two being Eaton Towers and IHS, according to media reports.