$1.8bn Helios Towers closing London IPO on 14 Oct

Heliso Towers raising in London for Africa expansion and 5G

Africa’s next mega-listing on the London Stock Exchange is an African company that operates 7,000 towers in the mobile telecommunications sector that continues to show strong growth. According a a recent report on Reuters, Helios Towers Ltd has priced its initial public offering (IPO) at 115-145 pence per share on 2 October, implying a total valuation of $1.42 billion to $1.79bn.

According to the report, the deal close books on 14 October and first day of trading is expected on 15 October. Bank of America/ Merrill Lynch International, Jefferies and Standard Bank are joint global coordinators while Renaissance Capital and EFG Hermes are joint bookrunners. Helios is planning a free float of about 25% of its shares.

The pricing is down from earlier suggestions of up to £2bn ($2.47bn), including in the Financial Times, when the listing was first announced on 12 September. There have been several global listings this year including e-commerce company Jumia in New York, telco Airtel Africa and payment provider Network International in London. Recently the share prices of both Airtel and Jumia have been weak.

Reuters quotes one source familiar with the Helios deal: “It’s a really good business in a strong sector, telecoms in Africa is the sort of growth story that appeals in this low-growth environment (globally)”.

According to Kash Pandya, CEO of Helios Towers, in a report on website Total Telecom: “The Sub-Saharan Africa telecommunications market is and will continue to be one of the most exciting and high growth in the world. The underlying demographic and macro-economic trends are compelling: a young, growing and increasingly urbanized population whose demand for high-quality mobile voice and data services continues unabated, which is being further fuelled by expansion of 3G and 4G services and one day 5G services; and GDP growth that across our markets is expected to be 4.5%. per annum to 2024.”

Helios rents towers in 5 countries to telecommunications companies such as Airtel, MTN, Orange, Tigo and Vodacom. It has entered the competitive South African market, operates in Republic of Congo and Ghana, and is the only provider of towers in Democratic Republic of Congo and Tanzania. It reached earnings before interest, depreciation, taxes and amortization (EBIDTA) of $201m at the end of the second quarter of 2019, after 18 consecutive quarters of growth in adjusted EBIDTA.

It aims to raise $125m by issuing new shares in an initial public offer (IPO) and to use the money to expand, including into other fast-growing markets such as Senegal and Morocco and potentially into Angola and Ethiopia. The offer would also allow shareholders, including the International Finance Corporation and telecommunications firms Millicom and Bharti Airtel, to sell some of their shares.

Helios was founded in 2009 and is incorporated in Mauritius, although it will set up a holding company in London chaired by Ghanaian businessman Samuel Jonah.

Market conditions in 2018 caused both Helios and Eaton Towers, another telecoms company, to cancel plans to list internationally. Eaton Towers, slightly smaller than Helios Towers, was sold to American Tower in May in a deal which gave it an enterprise value of $1.85bn, according to the FT.

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