Tower management company Eaton Towers has secured a $30 million - R240 million - loan to upgrade and build cellular towers in Ghana.
The loan is Eaton's first bank debt financing and follows a $150 million equity investment into Eaton Towers last September by Capital International Private Equity Funds, a private equity investor that focuses on emerging markets.
Eaton says the loan and equity investment will enable it to add scale to its business, as it will allow it to fund operational maintenance of its existing towers and allow it to build new towers. The company has drawn down $10 million (R80.6 million) of the facility so far.
The tower management company has a 10-year deal with Vodafone Ghana to operate and maintain its 750 towers in Ghana, which it signed in 2010. The deal allows it to sell capacity to other operators and the company has mobile firms such as MTN and Bharti Airtel signed up on some of its towers, says CFO Peter Lewis.
The company, which was founded in 2008, also has several other deals in the pipeline, some of which it is close to signing, says Lewis. He could not disclose any details.
The five-year loan can be refinanced at a later stage, says Lewis. However, he is “pleased” with the terms, especially as Eaton is a relatively new business and there are not many precedents in the tower-sharing space.
Lewis says tower-sharing is heading for a growth phase as cellular companies are under pressure, while governments are reluctant to allow many towers to be built in the same location.
In December last year, MTN, and New York-listed American Tower Corporation, said they would establish a joint venture tower company in Uganda. The new venture, ATC Uganda, will buy all of MTN Uganda's existing 1 000 towers for $175 million - about R1.4 billion - and a joint venture would be set up.
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