Subscribe
  • Home
  • /
  • Wireless
  • /
  • MTN still pursuing governance issues with affiliate IHS Towers

MTN still pursuing governance issues with affiliate IHS Towers

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 17 Jan 2024
An MTN cell tower in Soweto. (Photograph by Lesley Moyo)
An MTN cell tower in Soweto. (Photograph by Lesley Moyo)

Mobile operator MTN is still ironing out governance issues with its affiliate IHS Towers.

This, despite IHS yesterday announcing it has reached an agreement with shareholder Wendel to settle governance concerns that were raised last year.

Last year, 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 should 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, last year also lambasted the tower operator over governance failings.

Yesterday, IHS and Wendel announced they have finalised a settlement agreement in relation to ongoing litigation and proposed changes to the company’s articles of association, “reflecting a commitment to strong corporate governance and constructive shareholder engagement, for the benefit of pre and post-IPO financial and other shareholders”.

Sam Darwish, IHS Towers chairman and CEO, comments: “We believe the agreement announced today better aligns IHS Towers’ corporate governance with that of mature US-listed companies, which was an important goal we set at the time of our public listing.

“With the support of our pre-IPO [initial public offering] shareholder base, as well as newer investors post listing, we continue to focus on executing our strategy of creating value for all our stakeholders.”

The proposed changes to the articles include, among other things, a proposed declassification of the company’s board in two phases, with the periods extending through annual general meetings (AGMs) for fiscal years 2024 and 2025.

Following the AGM for fiscal year 2025, all directors will be elected on an annual basis, says IHS.

It adds that additional proposals to be tabled include reducing the threshold for shareholders to nominate directors from 30% currently 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 also proposes reducing the threshold for shareholders to bring business before a general meeting from 30% currently to 10%, on an individual shareholder basis following the AGM for fiscal year 2024 and on an aggregate basis following the AGM for 2025; introducing a new right for holders owning at least 25% of shares to requisition a general meeting following the AGM for fiscal year 2025; and reducing the threshold to remove directors from a special resolution currently to an ordinary resolution, in each case as set out pursuant to the settlement agreement.

However, MTN says governance talks with its affiliate are still ongoing.

Says the company in a statement to ITWeb: “MTN notes the proposals agreed between Wendel and IHS. Discussions with regard to MTN governance concerns remain ongoing.”

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.

IHS has previously indicated it declined mobile operator MTN’s demands to amend shareholder voting rights at the firm.

The firm said it wants to maintain its independence from MTN, which is Africa’s largest mobile operator.

Share