Charles Abuede
Signs are beginning to play into reality in recent times for Airtel Africa, Africa’s leading provider of telecommunications and mobile money service with questions emanating from several quarters concerning an announcement by the company revealing its plans to sell out its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc in a transaction approximately grossed at $108 million for the 1,229 towers in those markets.
Also, the telecoms provider has announced a proposed plan for a potential sale of its total 1000 tower assets which form part of the Group’s wireless telecommunications infrastructure network in Chad and Gabon to the purchaser. It announced that 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.
In a disclosure filed to the Nigerian Stock Exchange on Monday and signed by Simon O’Hara, Group Company Secretary revealed that 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 as the transactions are expected to close in or around the final three months of 2021.
According to the disclosure by Airtel, the aggregate gross consideration for the transactions is expected to be approximately $108 million. However, under the terms of the Transactions, 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, 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 $11 million of consideration is payable as part of the transactions.
The announcement by the telecoms giant has raised concerns for several stakeholders and comes after it announced, during the month that it has sold out its wholly-owned subsidiary, Airtel Mobile Money, for $200 million to TPG’s The Rise Fund which it revealed that the proceeds from the Transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries. Though, the group is already in discussions with other potential investors in relation to possible further minority investments into Airtel Money, up to a total of 25 per cent of the issued share capital of AMC BV.
Raghunath Mandava, CEO of Airtel Africa, in his comments on the planned sales, said: “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 furthering 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.“
Meanwhile, the exclusive Memorandum of Understanding (MoU) agreements entered by Airtel Africa for the potential sale of its tower assets in Chad and Gabon to the purchaser will also incorporate lease arrangements with the purchaser and build to suit commitments in Chad and Gabon as the Proposed transactions are not inter-conditional and are expected to close before the end of Airtel’s fiscal year 2022. The Group further disclosed that it expects to disclose the consideration details for the proposed transactions upon signing of the acquisition agreements in each market. Similarly, Group’s tower portfolios in the two markets of the proposed transactions together comprise 1,000 towers which form part of the Group’s wireless telecommunications infrastructure network.
Nevertheless, the value of the gross assets, according to Airtel, in the subject of the transactions at 31 March 2020 was $93.7 million and the profits before tax for the year to 31 March 2020 attributable to the assets are $3.3 million.
