Towerco and telco will splits OTC Oman fund 70:30
Tower company investor Helios Towers has agreed with Rakiza Telecommunication Infrastructure (RTI), a subsidiary of the Oman Infrastructure Fund, to share ownership of a new holding company, Omantel Telecommunications Company (OTC) in a deal set to expedite the networking of Oman. The formation of OTC will speed the networking of Oman, with the operational expertise of Helios Towers complimented by RTI’s extensive knowledge of the market, said Helios Towers chief executive officer Tom Greenwood.
On 11 May, Helios Towers and Omantel agreed for Helios Towers to acquire Omantel’s passive tower infrastructure portfolio of 2,890 sites for $575 million (£459.5m) in cash, representing an enterprise value of $615 million, including estimated transaction costs and capitalised ground leases of $40m. The acquisition should close in June, as long as all conditions are met. Helios Towers will have a 70% stake in OTC, with RTI holding the minority 30% share.
Local knowledge and towering assets
“Rakiza offers Helios Towers a wealth of local knowledge as we enter the Omani market and seek to strengthen our foothold in the Middle East,” said Greenwood. “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.” Helios Towers said it would retain operational control of the target assets, which would be consolidated in its financial statements from completion.
Helios wants Middle East presence
Through the transaction, Helios Towers said it would establish its presence in the Middle East region, becoming a “leading independent tower infrastructure provider” in Oman. The target assets were expected to deliver revenues of $59m and adjusted EBITDA of $40m in the first full year of operation, with further growth anticipated through colocation lease-up and 300 build-to-suit sites committed over the next seven years, for which $35m in growth capital expenditure was expected to be invested. The group said it was intending to finance the acquisition through its existing cash and available bank facilities.