Frontier Markets, Funds / ETFs

Nigeria Phone Tower IHS Managed to Raise $2.6bn

TowerNigeria based phone tower IHS has managed to raise $2bn in equity and $600m in debt. It appears to be the biggest equity fund raising by a local African company this decade.

IHS, the biggest tower company in Africa, will use the money to finance predominantly infrastructure spending.

“This is the largest equity raising by a private entity for the past 7-8 years in Africa — you’ve had mining, banks and now telecom infrastructure as a standalone sector is commanding this much interest from the international markets,” said IHS CEO Issam Darwish.

“This sends the right signal, it’s saying the international investor community believes in Africa and they’re putting a substantial amount of money behind that.”

Building and maintaining mobile communications towers in Africa tends to be more expensive than in other regions. That’s due to security costs and electricity shortages. Also revenue per user is typically lower.

Darwish predicted Africa could need 200-300k mobile towers over the next 10 years to meet future broadband demand, including up to 40k in Nigeria alone.

International Investors can access the Nigerian stock market the Global X Nigeria Index ETF (NGE). Unfortunately this product does not offer exposure to the local telecommunication sector as it’s heavy weighted towards the financials and energy. Also the size still remains sub $20m.

Global X Nigeria ETF Top Holdings and Sectors Split as at 30th June 2014; for more details please to the Global X website.

ETFs: NGE

Source: Reuters, Global X


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