MTN Demands Board Meeting Over Loggerheads With IHS Towers

MTN revealed that the company desired to hold a board meeting over the continuous leave-taking with IHS Towers.

MTN, which holds about 85.2 million (26 percent) of IHS Towers, one of the largest providers of telecommunications infrastructure in Africa, Latin America, and the Middle East, has called for an extraordinary board meeting, to find solutions to the corporate governance tussle with the tower provider.

BrandNewsDay reports that the genesis of MTN’s rift with the company is the IHS Towers’ decision to narrow MTN’s voting rights to 20 percent.

In 2022, the tower company acquired 5,701 towers from MTN. However, MTN owns 26 percent of IHS Towers through its subsidiary Mobile Telephone Networks (Netherlands) B.V.

The largest telecom operator in Africa said the acquisition was prior to IHS becoming a publicly listed company on the New York Stock Exchange (NYSE) in 2021.

According to a statement from MTN obtained by BrandNewsDay Nigeria, the parties have been engaged in discussions regarding corporate governance matters before the initial public offer (IPO). It said the discussions included the provisions of the shareholders’ agreement that was in place between IHS and its shareholders prior to the IPO, where an amended shareholders’ agreement was implemented post-IPO, with shareholders who are subject to post-IPO locking restrictions.

A Bloomberg report earlier in June stated that IHS said, “the proposals requested to be put forward were not in the best interests of the company as a whole or to the collective shareholder base.”

The Shareholders’ Agreement, purportedly, addressed MTN’s desire to be equally treated to other shareholders when it relates to aligning economic and voting rights, through a priority sale of the telco’s proportion of shares that are non-voting. MTN says it has not been able to dispose of the non–voting proportion of its shares and the company is unable to vote all its shares due to IHS’ share price underperforming since listing on the NYSE.

“MTN has requested the IHS board to call an extraordinary general meeting of the IHS shareholders in order to consider the abovementioned proposal, and any other shareholder proposals relating to governance, to which the group awaits a response. Beyond this, MTN is currently evaluating all its options with the intention of fully enforcing the Shareholders’ Agreement and Articles,” MTN said in a statement.

According to investing.com, IHS, which is listed as IHS Holdings on the NYSE, reported first-quarter earnings-per-share of $0.03, $0.15 adrift of the analyst estimate of $0.18. Revenue for the quarter came in at $602 million versus the consensus estimate of $569.85 million. IHS’ share price was at $8.49 on Thursday.

An extraordinary general meeting refers to any shareholders meeting called by a company other than its scheduled annual meeting. It is often utilised to deal with urgent matters between annual shareholders’ meetings.

IHS Holdings board includes Sam Darwish, CEO and chairman; Phuthuma Nhleko, former MTN CEO; John Ellis Bush, US presidential hopeful; Bashir Ahmad El-Rufai — elder brother of Nasir Ahmad El-Rufai, former governor of Kaduna — former ED NITEL and founder/CEO, Intercellular Communications Ltd; Frank Dangeard, chairman, NortonLifeLock; Nicholas Edward Land, chairman of Famham Castle-International Briefing & Conference Centre and chairman of the Instant Group; Ursula Burns, CEO of Xerox, Bryce Fort, founder of Emerging Capital Partners LLC; Maria Carolina, founder of Horto Gestora de Recursos Ltda; and Mohamed Darwish, founder of IHS.