“The combined value of the tower asset deals across the four African markets is estimated at around $250 million (Rs 1,812 crore),” said a person with direct knowledge. The funds would be used to reduce Airtel Group debt and invest in network and sales infrastructure in the respective operating countries.
“Airtel Africa announces the signing of agreements to sell its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc , and the aggregate gross consideration for the transactions is expected to be approximately $108 million,” the company said in a media statement Tuesday.
It added that the Madagascar/Malawi transactions, comprising two separate agreements, one in respect of each jurisdiction, “are subject to customary closing conditions, including required regulatory approvals and are not inter-conditional on each other.
At press time, Airtel Africa declined comment on ET’s queries around the total likely deal value of the tower transactions in the four African markets.
The Africa arm of Sunil Mittal-led Bharti Airtel said it had also “entered into exclusive memorandum of understanding agreements for the potential sale of its tower assets in Chad and Gabon to Helios,” adding that the “proposed transactions” are not inter-conditional and likely to close before end-FY22, and that the consideration details would be disclosed upon signing of the acquisition agreements in each market.
Bharti Airtel shares were marginally up 0.11% at Rs 528.50 in Tuesday late afternoon trade on BSE.
The Madagaskar and Malawi tower deals are likely to close in or around the fourth quarter of calendar 2021.
Airtel Africa’s towers portfolio in Madagascar and Malawi comprise 1,229 towers, while it has another 1000-odd across Chad and Gabon.
Airtel Africa CEO Raghunath Mandava said the latest tower transactions underline the company’s strong execution of its asset monetisation programme.
“These transactions will help to improve the mix of our debt and increase its tenor through long term leases, which are largely payable in local currency by our operating entities, while reducing foreign currency debt of the Group,” he added.
Over 70% of Airtel’s consolidated revenue comes from its India operations, while Africa contributes most of the rest. Airtel consolidated net debt at December end stood at Rs1.47 lakh-crore.
Airtel in India needs funds to not just expand its 4G operations to take on fierce rival Reliance Jio but also to pay off over Rs 20,400 crore in adjusted gross revenue (AGR) dues. It recently made an upfront payment of Rs 6,323.98 crore out of the Rs 18,699 crore it needs to pay DoT for buying airwaves in the just ended 4G spectrum auctions.
Airtel Africa added that as part of the Madagascar and Malawi transactions, it would build — to suit commitments with Helios — an additional 195 sites in these markets over the three years following completion, for which “a further $11 million of consideration is payable”.
Under the transaction terms, the Airtel Africa units would continue to develop, maintain and operate their equipment on the towers under separate lease arrangements, largely made in local currencies, with Helios.
