Airtel Africa, Bharti Airtel’s majority-owned pan-African division, has inked agreements for the sale of its telecom tower subsidiaries in Madagascar, Malawi, Chad and Gabon to regional infrastructure firm Helios Towers. The deals for each market are separate and not inter-conditional on each other. In Madagascar and Malawi, Helios will acquire Airtel’s local passive infrastructure operating companies for an expected total consideration of around USD108 million, with Airtel’s portfolio across the two nations comprising 494 sites in Madagascar and 735 in Malawi. Under the terms of the sale and leaseback deals, Airtel Africa’s subsidiaries will continue to develop, maintain and operate their equipment on the towers under separate lease arrangements. Further, Airtel has agreed built-to-suit commitments for an extra 195 sites (135 in Madagascar, 60 in Malawi) across the two markets, for which it will pay an additional USD11 million. The transactions are expected to close in or around Q4 2021.
In Chad and Gabon, however, Helios’ acquisition of Airtel’s assets is dependent on the operator securing the necessary regulatory permissions and licences in each of the respective jurisdictions. As such, the parties have entered into exclusive Memorandum of Understanding (MoU) arrangements for the potential sale of the tower assets in the two countries, which includes 539 sites in Chad and 459 sites in Gabon, with commitments for a further 60 in each market. These proposed transactions are expected to be completed by Q1 2022.
In a regulatory filing Bharti Airtel noted that the transactions and proposed transactions are part of the group’s move towards an asset-light business model, with the company looking to focus on its core subscriber-facing operations. Airtel plans to use the proceeds from the sale to reduce debt and invest in network and sales infrastructure in the respective markets. Commenting on the move, Airtel Africa CEO Raghunath Mandava was quoted as saying: ‘With these latest tower transactions we continue to demonstrate strong execution of our asset monetisation programme. Helios Towers has been a partner to our business in some of the OPCOs for many years and we look forward to further expanding this partnership with these new leases as we together seek to improve mobile connectivity and infrastructure across Africa. These transactions will also 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.’