Helios Towers Africa Raising $980 Million for Regional Expansion

Helios Towers Africa, the owner of telecommunications towers in three countries on the continent, is raising almost $1 billion in capital to expand in the region, Chief Financial Officer Andres de Orleans Borbon said.

The Mauritius-based company has raised $630 million in equity from shareholders including International Finance Corp., the World Bank’s investment unit, and is planning a syndicated loan worth more than $350 million, it said in an e-mailed statement today. HTA agreed yesterday to buy 3,100 African towers from New Delhi-based Bharti Airtel Ltd. (BHARTI)

“Part of it will be used for the Airtel transaction and the rest is carved out for future transactions in Africa,” de Orleans Borbon said in a telephone interview from London today. HTA, which has towers in Ghana, Tanzania and the Democratic Republic of Congo, can’t yet disclose the countries in which the acquired Bharti Airtel facilities are located, de Orleans Borbon said.

Carriers in Africa are offloading towers, which cost more to run on much of the continent than in some other parts of the world because of the need for backup generators and batteries to guard against power failures. HTA’s competitors in Africa’s tower business include London-based Eaton Towers, Boston-based American Tower Corp. (AMT) and Nigeria-based IHS Holding Ltd., which said in March it had raised $1.5 billion in capital over the past year.

While rivals like IHS have a mixed portfolio of owned and managed towers, HTA typically owns all its facilities, de Orleans Borbon said.

“Short-term partnerships always create the wrong incentives,” the executive said. “If you own the infrastructure, you can invest in the infrastructure.”

Bharti Airtel said yesterday the sale of its towers would allow India’s largest mobile-phone operator to cut debt. Stopping short of an outright sale, Orange SA (ORA)’s subsidiaries in Ivory Coast and Cameroon signed a 15-year agreement with IHS last year for the company to manage 2,000 towers that it can sublet to other operators.

“Some operators don’t want necessarily to raise money,” said de Orleans Borbon. “They focus on having a very low rental rate and they don’t get a lot of money for their towers upfront.”