Conditions met on Omantel, Helios $575 million tower deal

Wireless infrastructure group Helios Towers said “all closing conditions” are met as it set to acquire 2,890 cell tower sites of Omantel, Oman’s national operator. The $575 million deal — which was first announced in May 2021 — will transfer all of Omantel’s passive tower infrastructure portfolio transferred to Helios.

The deal is now “unconditional” after the satisfaction of “all closing conditions”, said Helios. Helios anticipates the formal completion by next month, in line with the series of long-stop date extensions announced by Helios as the deal prep dragged on. Helios did not explain the reasons for the delay of the deal.

Kash Pandya, former CEO of Helios Towers, who has since been replaced by Tom Greenwood said: “We are delighted to announce the creation of our long-term partnership with Omantel through this transaction. We view Oman as a very attractive and supportive market for foreign investments, with strong growth and exciting future prospects. We will be further investing capital in Oman as we add to the tower count through greenfield BTS site development and colocations, enhance the current tower portfolio and develop a talented local Omani team.”

Last year, Helios agreed to buy Omantel’s passive infrastructure portfolio of 2,890 sites for $575 million and representing an enterprise value of $615 million, including the Group’s estimate costs and capitalised leases of $40 million.

The Africa-focused mobile phone tower developer said it had previously intended to be the sole purchaser, but then agreed to purchase 70% of the newly-incorporated holding company.

Helios Towers explained that the rationale for the partnership was to combine the operational expertise of Helios with the local and regional expertise of Rakiza Telecommunication Infrastructure LLC (Rakiza), a wholly-owned subsidiary of Oman Infrastructure Fund (Rakiza Fund) which will hold the remaining 30 per cent.

Once completed, Helios Towers and Omantel will enter into a long-term service contract for a period of 15 years.

Through the deal, Helios will make a foray into the Middle East infrastructure market, having been Africa-focused over the last few years.

The target assets are expected to deliver annual revenue of $59 million and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $40 million in the first full year of operations with further growth anticipated through collocation lease-up and 300 build-to-suit sites committed over the next seven years, for which $35 million growth capex is expected to be invested.

Other commercial targets for Helios include number-two operator Ooredoo Oman and Vodafone Oman, the country’s third player, which debuted services in late last year. Helios new CEO Tom Greenwood flagged to analysts earlier this month that he had recently visited Oman for a “couple of days” and met with “some key stakeholders there, including all of our customers, which include Omantel, Ooredoo, and Vodafone”.