STJ advises Helios Towers on its inaugural US$110m Primary Capital Raise and US$50m Convertible Bond Tap Issue
2021
We are pleased to announce that STJ Advisors acted as independent advisor to Helios Towers plc, the leading independent telecommunications infrastructure company operating in Africa, on a very successful combined equity placement and convertible bond tap issue. The Equity Placing is an inaugural US$110m primary capital raise for the Company and occurred alongside a tap issue of the Company’s existing US$250m Convertible Bonds due 2027 raising a further US$50m. The Combined Offering raised approximately US$160m of gross proceeds (and included a retail equity tranche).
STJ advised Helios Towers on its IPO in October 2019 and continues to advise the company on its wider capital markets activities including advising on its US$250m inaugural Convertible Bonds in March 2021.
The Combined Offering achieved an exceptional result for Helios Towers:
- Successful first straight equity raise post-IPO, to support Helios Towers’ acquisition strategy (including recently announced acquisitions in Oman, Senegal, Chad and Gabon, Madagascar and Malawi) and to rebalance leverage within the medium term guidance
- Equity Placing upsized on the back of strong quality support from investors
- Heavily oversubscribed Convertible Bond Tap Offering enabling 100% outright allocations without any delta hedging (and significant follow-on with investors very happy with the aftermarket performance of the original Convertible Bond issuance)
- Equity Pricing at 163p; a tight 5.3% discount to close; narrower than discounts for first time issuers of primary equity over the last 3 years (c. 5.8%); and at price higher than any achieved in previous secondary sell-downs in Helios Towers by pre-IPO shareholders (not advised by STJ)
- Convertible Bond Tap offering priced at 106.039% of principal implying a yield-to-maturity of 1.76% p.a. (against an original yield-to-maturity of 2.875% p.a.)
- Highly oversubscribed and high-quality equity book of demand and allocations (with a strong-long-only bias) providing for a positive and stable aftermarket above issue price
- Conversion of new high quality, UK long-only anchor demand into the Equity Placing, which provided strong transaction and aftermarket support
- Well-subscribed concurrent retail offer to both existing and new private shareholders
STJ provided advice on all crucial aspects of the capital markets issues, including timing, management of the syndicate banks, structuring, marketing, pricing and allocation across the Equity Placing and the Convertible Bond Tap Offering including:
- Strategic advice on structuring and timing of the Combined Placing relative to other pre-IPO shareholders sales and perceived overhang
The recent Millicom sell-down of c. 7.7% of the Company cleared an overhang with two cornerstone institutional investors identified in company marketing and enabled a clean subsequent Company transaction
- Continued work with Management since IPO, to develop and align its equity proposition to the market, evidenced in new tier one, long-only anchor support for the primary raise
- Continued advice to Helios Towers around preparation, investor engagement and education strategy which resulted in strong conversion in the Equity Placing (and which supported other recent secondary sell-downs by pre-IPO shareholders)
STJ Atlas database deployed to recommend investors into the placing
Ongoing investor engagement strategy (with extended broker/research coverage and a broad corporate marketing effort) paved the way for two new cornerstone holders in the recent Millicom sale
Broad, yet targeted, wall-crossing exercise following significant preparatory work uncovered meaningful premium demand for the transaction resulting in strong immediate momentum, an equity upsize and an improvement of overall transaction terms.
