MTN assigns R2.8bn shareholder loan to Nigerian tower group

Johannesburg - MTN[JSE:MTN] announced on Thursday that it had assigned a long dated $231m shareholder loan to Nigerian teleco company IHS Holding - negatively impacting the company's 2017 profit. 

The assignment of the loan to IHS led to a loss on transfer of the carrying value of the loan of about R2.8bn - or 158 cents per share - for 2017 for MTN. 

“This accounting loss on transfer will impact earnings per share (EPS) and headline earnings per share (HEPS) for 2017, but not earnings before interest, tax, depreciation and amortisation (EBITDA),” the company said in a statement.

MTN added that the shareholder loan which was due in 2024/2025 to IHS Holding has facilitated certain network volume commitments and provides more attractive terms for MTN Nigeria’s future network roll-out applicable from 2018 onward. 

“The agreement allows MTN Nigeria to continue to invest in its network more efficiently, and further simplifies MTN’s interests in IHS. 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 statement. 

In February this year, MTN increased its stake in the IHS Group from 15% to approximately 29%.

To facilitate the transaction, MTN said it will exchange its 51% interest in Nigeria Tower InterCo, the parent company of Nigerian telecom tower operator INT Towers, for the additional shareholding in IHS Holding.

INT Towers, which was founded in 2014 by IHS Group and MTN, previously acquired 8 850 existing towers from MTN Nigeria.

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