telecom

Helios finds local partner for $575mn Omantel towers deal

June 9, 2022

Muscat – Helios Towers – which last year signed a deal to acquire Omantel’s passive tower infrastructure for US$575mn – has signed an agreement with Rakiza Telecommunication Infrastructure to form a joint venture holding company for the acquisition of Omantel’s passive infrastructure assets in Oman.

Rakiza Telecommunication Infrastructure is a wholly owned subsidiary of Oman Infrastructure Fund (Rakiza Fund), a fund that is co-managed by the Oman Infrastructure Investment Management (OIM) and Equitix.

‘Helios Towers has entered into an agreement pursuant to which Rakiza Telecommunication Infrastructure will purchase a 30 per cent minority stake in the newly incorporated holding company for Omantel’s passive infrastructure assets in Oman, with Helios Towers purchasing the remaining 70 per cent stake,’ Helios Towers, the Africa and Middle East-focused leading independent telecommunications infrastructure company said in a statement.

This partnership ‘will further assist the expansion of telecommunications infrastructure across Oman, combining the proven operational expertise of Helios Towers with a local partner which has extensive knowledge of the market and dedicated focus on developing infrastructure across the Middle-East’, the statement said.

Helios Towers expects that the acquisition of Omantel’s passive towers infrastructure will close in or around the end of the second quarter of 2022, subject to satisfaction of outstanding closing conditions.

Tom Greenwood, CEO of Helios Towers, said, “We are delighted to be partnering with Rakiza, who offers Helios Towers a wealth of local knowledge as we enter the Omani market and seek to strengthen our foothold in the Middle East. Rakiza not only offers a highly experienced management team through its deep public and private sector expertise, but it is also closely aligned to our goal of driving sustainable value creation through infrastructure and connectivity.”

Muneer al Muneeri, chairman of Rakiza Fund, said, “Helios Towers has an excellent track record of generating growth in its many markets and we are delighted to partner with a leading telecommunications infrastructure business that has a proven history of delivering connectivity and advancing telecommunications in its markets. This, combined with our expertise and strong local network, underpins our confidence that the Omantel transaction will be a positive development for us and Oman.”

On May 11, 2021, Helios Towers and Omantel entered into an agreement for Helios Towers to acquire Omantel’s passive tower infrastructure portfolio of 2,890 sites (target assets), for a cash consideration of US$575mn and representing an enterprise value of US$615mn, including the group’s estimate of transaction costs and capitalised ground leases of US$40mn.

Under the agreement entered into Tuesday, Helios Towers will now purchase a 70 per cent interest in the newly incorporated holding company for the target assets with Rakiza purchasing the remaining 30 per cent.

‘The consideration (which remains unchanged from the original acquisition terms) will be paid 70 per cent by Helios Towers and 30 per cent by Rakiza, adjusted down pro-rata by potential local third party debt raised,’ Helios Towers said.

As per the agreement, Helios Towers will retain operational control of the target assets. Through the transaction, Helios Towers will establish its presence in the Middle-East region, becoming a leading independent tower infrastructure provider in Oman.

‘As previously disclosed, the target assets are expected to deliver revenues of US$59mn in the first full year of operations with further growth anticipated through colocation lease-up and 300 build-to-suit sites committed over the next seven years, for which US$35mn growth capital spending is expected to be invested,’ Helios Towers added.

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