Africa focused Helios has $350m set for expansion after pandemic eases

Helios Towers Ltd.’s plans to expand following last year’s London share sale may have been waylaid by the coronavirus outbreak, but the Africa-focused company has $350 million primed and ready for when deal-making can resume.

The telecommunications firm raised funds in an initial public offering in October, with the proceeds earmarked to fund an entry into new African markets and add to a portfolio of almost 7,000 towers.

It’s not that talks stalled really as one can always have conference calls, but for any real M&A to happen you need things like on-the-ground site surveys

Chief Executive Officer Kash Pandya said in an interview.

It will be slower for a few months, but the world will have to get back to normality at some point.

Helios’s capacity to finance deals remains intact, with $125 million in cash and another $225 million in debt available for acquisitions, the CEO said. The company plans to buy 2,500 towers over the next five years and build a similar number, he said.

Helios Towers to Use IPO Proceeds to Expand in New Markets Tower companies such as Helios and closely-held IHS Holding Ltd. have been expanding in Africa to take advantage of faster internet connections and takeup of smartphones across the continent. Meanwhile wireless carriers around the world have been disposing of tower assets to free up capital for other ventures, creating a sweet spot for deal-making.

Helios is hardly alone in having its expansion plans delayed by the coronavirus. Companies all over the world have had to suspend M&A plans as business activity slows amid efforts to contain the pandemic, which has infected more than 1 million people and killed over 50,000. While Africa remains the least affected continent outside Antarctica, many countries have closed borders and imposed lockdowns to limit the spread of the virus.

“We had to face similar and tough times in some of our markets before, such as in the Democratic Republic of Congo with the Ebola outbreak,” Pandya said. “Our past experience in an environment such as this, is that network traffic actually picks up.”

Helios shares have gained 7.8% since the IPO, bucking a global trend of plunging stock prices. Countries being considered for expansion before the outbreak included Tanzania, Morocco and Ethiopia among others, Pandya said.

In December 2010, an investor group led by Helios agreed to the acquisition of a majority equity interest in Interswitch Limited (“Interswitch”), a top payment processing service provider in Nigeria. And exactly about a year ago, precisely April 4, 2019, Axxela Limited (“Axxela”), sub-Saharan Africa’s preferred fast-growing gas & power portfolio company in Nigeria, announced full acquisition and 100% ownership by Helios Investment Partners.