South Africa’s largest pharmaceutical manufacturer, Aspen Pharmacare, may have announced a relatively tepid set of annual results for the year ended 30 June 2019, but the anticipation of a reduced debt load freeing up cash flows pushed its share price up 12% the day after its results announcement.
Helios Towers tries again for a London listing
Helios Towers is planning to list on the London Stock Exchange, nearly 18 months after its first failed attempt. It made the announcement on September 12.
The company, which could be listed as early as October, runs telecommunications towers across the African continent. It leases to operators Airtel, MTN, Orange, Tigo and Vodacom.
- A second listing could take place later in Johannesburg, according to Bloomberg.
- Helios’ value could reach $3bn
Loss of appetite
When Helios abandoned its listing in London and Johannesburg last year, the company was valued at $2.47bn. It wanted to allow Helios’ shareholders, including the Soros Fund Management LLC to reduce its stake. Helios quickly abandoned the plan after a mixed reception from the markets around its growth prospects in Africa.
- The company was founded in Mauritius in 2009.
- It owns 7,000 towers in five African countries (South Africa, Congo Brazzaville, Ghana, Democratic Republic of Congo, and Tanzania)
Helios intends to increase its influence over several African countries, including Senegal, Morocco, Angola and Ethiopia.
- The company hopes to raise $125m by issuing new shares, and reselling existing shares held by the International Finance Corporation, Millicom and Bharti Airtel, according to Reuters.
The company’s second attempt follows strong growth over the past 18 months. It also appears to be motivated by the initial public offering (IPO) of several other companies with a strong presence on the African continent, according to the Financial Times.
- Payment solutions provider in the Middle East and Africa, Network International and the Indian telecommunications operator Bharti Airtel Africa have both listed in the British capital this year.
- The African online retailer, Jumia opted for a listing in New York.
Nigeria’s digital payment provider, Interswitch appears to be preparing for its dual-listing in London and Lagos.
- As part of the IPO, Helios plans to establish a holding company in London, run by the former president of the AngloGold Ashanti mining group, Sam Jonah.
Top 500 african companies 2018
A glimmer of hope
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Concerns over value
Mobile operators are faced with constantly shrinking margins, especially in Africa.
Over the past decade, many operators have opted to sell their giant cell towers, preferring to focus on their core business.
- Helios manages a fleet of towers around the world, rising from 15,000 units in 2012 to more than 55,000 in 2017.
- Nigeria’s IHS Towers (23,500 units) dominates the sector, locally. It also postponed its listing on the New York Stock Exchange ahead of the 2019 presidential election in Nigeria in February.
- The same goes for Eaton Towers (5,000 towers). At the beginning of 2018, the British firm announced an IPO but abandoned the listing due to insufficient value to finance its growth. Eaton was finally absorbed in May 2019 for $1.85bn by American Tower, the second largest player in the African market in June.
Bottom Line: As mobile operators focus on rolling out 5G technology, Helios and its competitors are hoping to grow their businesses by managing their cell tower infrastructure. Will the market back them?