IHS Towers and MTN step closer to resolving governance concerns

Africa’s largest cellphone tower operator and the continent’s biggest mobile provider are using their recently renegotiated tower agreements as a foundation to iron out their disagreements on governance.

In a joint statement on Tuesday, IHS Towers and MTN said they would now “work constructively to find a mutually agreeable resolution to governance issues previously raised”.

Last week, the two companies put aside some of their differences, announcing a renegotiated agreement of the mobile operator’s tower leases in Nigeria. The move helps the communications group to reduce amounts that it has to pay for the infrastructure in foreign currency, specifically the dollar. 

With this new deal in place, IHS and MTN have completed the renewal of about 26,000 MTN tenancies on IHS’s infrastructure across six African markets — Nigeria, Rwanda, Ivory Coast, Cameroon, Zambia and SA.

“The renewal of the various contracts across our markets into the next decade put MTN operations in the respective markets onto a more sustainable footing,” said MTN group CEO Ralph Mupita.

“We remain focused on ensuring our networks are well invested, have high availability and have the headroom to meet the growing and structural demand for data going into the future. These renewals are key to those priorities.”

IHS, in which MTN holds a 26% stake, has had an acrimonious relationship with investors in the past year due to governance issues. Apart from being its largest investor, MTN is IHS’s largest customer.

Sam Darwish, chair and CEO of IHS Towers, said: “As our largest customer and longest serving partner, we are proud to have completed the renewal of all tenancies with MTN Group in our African markets. Today, we reinforce our strategic relationship and commit to increased operational stability, by securing our revenue streams into the next decade, and leveraging our shared innovation to deliver critical connectivity and support digital inclusion across the African continent.”

Tension spilt over into the groups’ commercial relationship, leading both companies to sign deals with other players to reduce reliance on each other.

“We look forward to working constructively with IHS on the outstanding governance issues now that commercial arrangements have been concluded,” Mupita said. 

Last year MTN said it wanted to have a greater say in IHS’s activities. It drafted a proposal to align its 26% equity stake and voting rights — capped at 20% — that failed to be put to a vote at IHS’s AGM.

“We are excited by the next phase of our commercial partnership and welcome the opportunity to work constructively for the benefit of the end user,” Darwish said. 

In July, IHS shareholders approved a proposal to amend the company’s memorandum and articles of association, with a number of key items. These include reducing the threshold for shareholders to nominate directors from 30% to 10% on an individual shareholder basis after the AGM for the 2024 financial year, and on an aggregate basis after the AGM for 2025. 

In July 2023, shareholder Wendel filed a case with the grand court of the Cayman Islands to force a vote at IHS on governance proposals after the board failed to put it forward at its June shareholder meeting. In August, MTN threatened similar court action against IHS.

gavazam@businesslive.co.za