To view the PDF file, sign up for a MySharenet subscription.

MTN GROUP LIMITED - MTN Group assigns its long dated $231m shareholder loan to IHS Holding Ltd

Release Date: 28/12/2017 08:25
Code(s): MTN     PDF:  
Wrap Text
MTN Group assigns its long dated $231m shareholder loan to IHS Holding Ltd

MTN Group Limited
(Incorporated in the Republic of South Africa)
Registration Number 1994/009584/06
Share code: MTN
ISIN: ZAE000042164
("MTN Group" or “MTN”)


MTN Group assigns its long dated $231m shareholder loan to IHS Holding Ltd and agrees to
improved and volume-based commercial terms for MTN Nigeria’s future network expansion plans,
resulting in a once-off accounting charge to HEPS and EPS for 2017.

Shareholders are advised that MTN Group (through MTN Nigeria Towers SPV B.V.) has assigned its
shareholder loan of approximately $231m (R2.8bn) which was due in 2024/2025 to IHS Holding Ltd
(together with other group companies, “IHS”) and IHS has facilitated certain network volume
commitments and provided more attractive terms for MTN Nigeria’s future network rollout applicable
from 2018 onwards. The agreement allows MTN Nigeria to continue to invest in its network more
efficiently, and further simplifies MTN’s interests in IHS. The agreement will enable MTN and IHS to
mutually benefit from continued investment and commitment to the rollout of broadband and data
services in Nigeria.

Under International Financial Reporting Standards, the operational cash flow benefits to be realised
from the improved commercial terms of the future rollout are not capitalised as a prepayment and
will be accounted for as and when they are realised. As a result, the assignment of the loan to IHS
leads to a loss on transfer of the carrying value of the loan of approximately ZAR2.8bn or 158 cents
per share for 2017 for MTN Group. This accounting loss on transfer will impact earnings per share
(EPS) and headline earnings per share (HEPS) for 2017 but not earnings before interest, tax,
depreciation and amortisation (EBITDA).

In February 2017, MTN Group exchanged its interest in Nigeria Tower Interco B.V. (“Interco”) resulting
in MTN Group having an economic interest of 29% in IHS and no longer being a shareholder of Interco.
MTN Group realised a profit of approximately R6bn on this transaction recorded in its 2017 first half
results.

The combination of the profit from the exchange of Interco shares for IHS shares in the first half of the
2017 financial year and the loss on assignment of the shareholder loan in the second half of the year
has a combined positive impact of R3.2bn to earnings in 2017.

The shareholder loan arose as part of MTN Nigeria’s tower transactions whereby MTN Nigeria sold a
portfolio of towers to INT Towers (Nigeria) (“INT”) in 2014 and 2015 which, through Interco, was 51%
owned by MTN Nigeria Towers SPV B.V. and 49% by IHS. At the time of the original transaction MTN
also acquired an approximate 15% interest in IHS. When forming INT, MTN Group (through MTN
Nigeria Towers SPV B.V.) as well as IHS, provided proportionate shareholder loans to INT. These loans
were subordinated and due for repayment in 2024 and 2025 with interest capitalised until 2 years
prior to repayment.

Note: Using an FX rate of US$:ZAR 12.31 as at 27 December to convert the US$ value of the loan to
ZAR.

The financial information disclosed in this announcement has not been reviewed and reported on by
MTN’s external auditors.

Fairland
28 December 2017

Sponsor
Deutsche Securities (SA) Proprietary Limited

Date: 28/12/2017 08:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story