IHS addresses shareholder concerns after Wendel action
Africa’s largest cellphone tower provider says proposal to amend memorandum and articles of association has been approved
02 July 2024 - 05:00
by Mudiwa Gavaza
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
IHS shareholders have approved the governance reforms agreed with Wendel, the group’s second-largest investor, but is yet to rectify some of the issues that had been raised by MTN, its biggest shareholder.
IHS, in which MTN holds a 26% stake, has had an acrimonious relationship with investors in the past year due to governance issues.
On Monday, Africa’s largest cellphone tower provider said shareholders had approved at an AGM a proposal to amend the company’s memorandum and articles of association, with a number of key items. These include reducing the threshold for shareholders to nominate directors from 30% previously to 10% on an individual shareholder basis after the AGM for the 2024 financial year, and on an aggregate basis after the AGM for 2025.
In July 2023, Wendel filed a case with the grand court of the Cayman Islands to force a vote at IHS on governance proposals after the board failed to put it forward at its June shareholders’ meeting. In August, MTN threatened similar court action against IHS.
Last year, MTN called out “governance concerns at IHS”. The mobile operator wants to have a greater say in IHS’ activities. It drafted a proposal to align its 26% equity stake and voting rights — capped at 20% — that failed to be put to a vote at IHS’ AGM.
Business Day reached out to MTN, which declined to comment on the developments.
Other resolutions passed include to:
Reduce the threshold for shareholders to bring business before a general meeting from 30% previously to 10%, on an individual shareholder basis after the AGM for 2024 and on an aggregate basis after the AGM for 2025.
Declassify the company’s board in two phases, with the periods extending through AGMs for 2024 and 2025.
Introduce a new right for shareholders owning at least 25% of shares to request a general meeting after the AGM for fiscal year 2025.
Reduce the threshold to remove directors from requiring a special resolution previously to an ordinary resolution.
Much of the tension between IHS and shareholders comes down to its stock market performance. IHS, valued at $1.08bn, has lost almost 81% of its value since listing on the New York Stock Exchange in October 2021.
Tension between MTN and the tower operator has spilt over into their commercial relationship.
A court in Nigeria recently put on hold the implementation of a relocation of 2,500 towers from IHS to American Tower Company (ATC). In September 2023, MTN Nigeria said its leases on 2,500 sites, due to expire in 2024 and 2025, had been awarded to ATC Nigeria after a bidding process.
Even then, IHS said it managed to renew tower tenancy contracts with MTN in Rwanda.
“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,” said Sam Darwish, chair and CEO of IHS Towers.
Apart from being its largest investor, MTN is IHS’s largest customer.
Correction: July 2 2024 A previous version of this article said IHS had rectified some of MTN’s governance concerns. This is not the case.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
IHS addresses shareholder concerns after Wendel action
Africa’s largest cellphone tower provider says proposal to amend memorandum and articles of association has been approved
IHS shareholders have approved the governance reforms agreed with Wendel, the group’s second-largest investor, but is yet to rectify some of the issues that had been raised by MTN, its biggest shareholder.
IHS, in which MTN holds a 26% stake, has had an acrimonious relationship with investors in the past year due to governance issues.
On Monday, Africa’s largest cellphone tower provider said shareholders had approved at an AGM a proposal to amend the company’s memorandum and articles of association, with a number of key items. These include reducing the threshold for shareholders to nominate directors from 30% previously to 10% on an individual shareholder basis after the AGM for the 2024 financial year, and on an aggregate basis after the AGM for 2025.
In July 2023, Wendel filed a case with the grand court of the Cayman Islands to force a vote at IHS on governance proposals after the board failed to put it forward at its June shareholders’ meeting. In August, MTN threatened similar court action against IHS.
Last year, MTN called out “governance concerns at IHS”. The mobile operator wants to have a greater say in IHS’ activities. It drafted a proposal to align its 26% equity stake and voting rights — capped at 20% — that failed to be put to a vote at IHS’ AGM.
Business Day reached out to MTN, which declined to comment on the developments.
Other resolutions passed include to:
Much of the tension between IHS and shareholders comes down to its stock market performance. IHS, valued at $1.08bn, has lost almost 81% of its value since listing on the New York Stock Exchange in October 2021.
Tension between MTN and the tower operator has spilt over into their commercial relationship.
A court in Nigeria recently put on hold the implementation of a relocation of 2,500 towers from IHS to American Tower Company (ATC). In September 2023, MTN Nigeria said its leases on 2,500 sites, due to expire in 2024 and 2025, had been awarded to ATC Nigeria after a bidding process.
Even then, IHS said it managed to renew tower tenancy contracts with MTN in Rwanda.
“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,” said Sam Darwish, chair and CEO of IHS Towers.
Apart from being its largest investor, MTN is IHS’s largest customer.
Correction: July 2 2024
A previous version of this article said IHS had rectified some of MTN’s governance concerns. This is not the case.
gavazam@businesslive.co.za
Cabinet delay weighs on rand
MTN SA, Cell C and Liquid oppose bid by Vodacom to halt spectrum pooling
'MTN's commitment to SA's development will not waver'
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
MTN and other operators push for tariff hikes in Nigeria
MTN Nigeria sets out plan to return to profit
Funding opportunities abound in telecoms infrastructure, says RMB
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.