Tuesday, March 23, 2021 / 11:10AM / NSE / Header Image Credit: Dar one
Airtel Africa, a leading provider of
telecommunications and mobile money services, with a presence in 14 countries
across Africa, today announces the signing of agreements to sell its
telecommunications tower companies in Madagascar and Malawi to Helios Towers
plc (the "Purchaser"), a leading independent telecommunications infrastructure
company in Africa (together, the "Transactions"). The Group's tower portfolios
in these two markets together comprise 1,229 towers which form part of the
Group's wireless telecommunications infrastructure network.
The 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. The
Transactions are expected to close in or around calendar Q4 2021.
The aggregate gross consideration for the Transactions is expected to
be approximately $108m. Under the terms of the Transactions, the Group's Airtel
Africa's subsidiaries will continue to develop, maintain and operate their
equipment on the towers under separate lease arrangements, largely made in
local currencies, with the Purchaser. In addition, as part of the Transactions,
the Group has agreed to build to suit commitments with the Purchaser for an
additional 195 sites across Madagascar and Malawi over the three years
following completion, for which a further $11m of consideration is payable.
In addition, Airtel Africa has entered into exclusive Memorandum of
Understanding agreements for the potential sale of its tower assets in Chad and
Gabon to the Purchaser (the "Proposed Transactions"). The Proposed Transactions
are subject to the signing of definitive legal agreements for sale, including
customary closing conditions such as required regulatory approvals. It is envisaged
that the Proposed Transactions will also incorporate lease arrangements with
the Purchaser and build to suit commitments in Chad and Gabon. The Proposed
Transactions are not inter-conditional and are expected to close before the end
of our fiscal year 2022.
The Group expects to disclose consideration details for the Proposed
Transactions upon signing of the acquisition agreements in each market.
The Group's tower portfolios in the two markets of the Proposed
Transactions together comprise c.1,000 towers which form part of the Group's
wireless telecommunications infrastructure network.
The Transactions and the Proposed Transactions are the latest
strategic divestment of the Group's tower portfolio as it focuses on an
asset-light business model and on its core subscriber-facing operations.
The proceeds from the Transactions and the Proposed Transactions will
be used to reduce Group external debt and to invest in network and sales
infrastructure in the respective operating countries.
The value of the gross assets the subject of the Transactions at 31
March 2020 was $93.7m and the profits before tax for the year to 31 March 2020
attributable to the assets the subject of the Transactions are $3.3m.
Raghunath Mandava, CEO of Airtel Africa, commented:
"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".
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