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MTN affiliate IHS engages shareholders after governance squabbles

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 02 Jul 2024
IHS Towers owns 70% of MTN SA’s towers business.
IHS Towers owns 70% of MTN SA’s towers business.

Tower operator IHS has signed contract renewals and extensions with South African-based mobile operator MTN and other African telcos.

The contract developments come after IHS and its shareholders, including MTN, were embroiled in disputes over governance issues at the tower operator.

IHS yesterday announced the results of its 2024 annual general meeting (AGM) of shareholders. It says all the proposals put to the vote of shareholders were adopted, including the re-election of Frank Dangeard, Phuthuma Nhleko, Mallam Bashir El-Rufai and Nicholas Land as independent directors until the company’s 2025 AGM, and the proposal to amend and restate the company’s memorandum and articles of association.

From the meeting, IHS says shareholders agreed to declassify the company’s board in two phases, with the periods extending through AGMs for fiscal years 2024 and 2025.

It notes they also agreed to reduce the threshold for shareholders to nominate directors from 30% previously to 10%, on an individual shareholder basis following the AGM for fiscal year 2024, and on an aggregate basis following the fiscal year AGM for 2025.

It was also agreed to reduce the threshold for shareholders to bring business before a general meeting from 30% previously to 10%, on an individual shareholder basis following the AGM for fiscal year 2024 and on an aggregate basis following the AGM for 2025.

IHS will also introduce a new right for shareholders owning at least 25% of shares to request a general meeting following the AGM for fiscal year 2025 and reduce the threshold to remove directors from requiring a special resolution previously to an ordinary resolution.

Taking a stand

Last year, the IHS annual meeting devolved into a tense standoff over investor power, after the tower operator dismissed demands from two of its largest stakeholders – MTN and Wendel.

Wendel and MTN, which together own about 45% of the company, wanted shareholders with at least a 10% stake to have the power to nominate board members.

However, the IHS board dismissed the proposals.

The mobile operator then issued a statement accusing IHS of wilfully breaching the shareholders’ agreement and articles over voting powers.

MTN, through its subsidiary Mobile Telephone Networks (Netherlands), holds approximately 85.2 million (26%) of IHS shares.

The UK-headquartered IHS Towers is one of the largest telecommunications infrastructure providers in Africa, Latin America and the Middle East by tower count, and the fourth-largest independent multinational tower company globally.

Another IHS shareholder, Blackwells, which owns 12% of shares in the firm, in 2023 also lambasted the tower operator over governance failings.

In 2022, IHS Towers completed the acquisition of over 5 000 MTN towers in SA, in a deal that saw the New York Stock Exchange-listed tower company fork out R6.4 billion.

IHS Towers now owns 70% of MTN SA’s towers business, with the remaining 30% owned by a B-BBEE consortium.

It previously indicated it declined mobile operator MTN’s demands to amend shareholder voting rights at the firm, saying it wants to maintain its independence from MTN, which is Africa’s largest mobile operator.

Moving forward

In a statement yesterday, Sam Darwish, chairman and CEO of IHS Towers, states: “I am pleased that shareholders have supported our efforts and commitment to strong corporate governance and constructive shareholder engagement.

“The matters tabled and approved at this year’s AGM are a result of our board’s responsiveness to shareholders over the past year, and further align our interests with shareholders as we continue to operate with independence and neutrality among mobile network operators.”

IHS notes the company continues to focus on a number of important areas, including its ongoing strategic review, commercial progress across the portfolio and the strength of its balance sheet.

“We are making great commercial progress, as highlighted by the renewals and extensions with both MTN and Airtel this year,” Darwish says.

“With MTN Rwanda MLA just signed, we have now completed all contract renewals and extensions with MTN outside Nigeria covering the five countries of Cameroon, Cote d’Ivoire, Zambia, Rwanda and South Africa – a total of over 12 200 tenancies renewed or extended into the next decade.

“The renewals with our largest client, in addition to the signing of a new 3 950 tenant multi-year rollout agreement with Airtel in Nigeria announced earlier this year, are a testament to the criticality of our digital infrastructure to the industry and reaffirms our leading position on the continent.

“We appreciate the engagement and input from all our shareholders as we work to achieve this goal. We will continue to engage with our various stakeholders to enhance value and drive shareholder returns.”