IHS secures $439m loan to refinance debt and support expansion

IHS Towers, Africa’s largest telecom tower company, has secured a new $439 million loan to manage currency risks and support its operations across multiple regions. Almost half of the loan is in South African Rand, while the other half is in USD ($255 million).

IHS Towers will use the loan to pay off a $430 million debt from October 2022 which was set to mature in 2025. By refinancing early, the company may benefit from better terms, potentially lowering interest costs and extending its debt repayment timeline. This transaction is described as “leverage neutral,” meaning it won’t significantly change the company’s debt-to-equity ratio.

Both parts of the loan come with a 4.50% interest rate. The US dollar portion is tied to the three-month SOFR (Secured Overnight Financing Rate), and the South African Rand portion is tied to the three-month JIBAR (Johannesburg Interbank Average Rate). These rates fluctuate with the market, which could impact the overall cost of borrowing for IHS Towers.

The entire amount is a bullet-term loan, meaning IHS will repay the full amount at the end of the term rather than making periodic payments. This gives the company immediate access to the funds, but it must make a lump-sum repayment after five years.

“This is a group-level financing and therefore has no direct impact on any particular market,” an IHS Towers spokesperson told TechCabal.

The company laid off 100 employees in mid-2024 as devaluation in its primary market, Nigeria, squeezed its margins. Its losses ballooned to $1.9 billion in 2023, up from $469 million in 2022.

IHS has been looking to reduce its dollar exposure. It renegotiated tower contracts with major clients such as MTN Nigeria, collecting fees in USD and local currency as well as adding a component for diesel costs.