Airtel Africa signs deals to sell telecoms tower to Helios Towers for $108m
By Kayode Tokede
Airtel Africa has signed agreement to sell its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc, a leading independent telecommunications infrastructure company in Africa.
In a notification at the Nigerian Stock Exchange, the group’s tower portfolios in the two markets were said to comprise 1,229 towers which form part of it’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 interconditional on each other. The Transactions are expected to close in or around calendar Q4 2021,” the notification said.
“The aggregate gross consideration for the transactions is expected to be approximately $108million. 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.”
The notification also hinted that Airtel Africa had entered into exclusive Memorandum of Understanding agreements for the potential sale of its tower assets in Chad and Gabon also to Helios Towers.
“The Proposed Transactions are subject to the signing of definitive legal agreements for sale, including customary closing conditions such as required regulatory approvals,” the notification said.
“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 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 focusses 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.
CEO of Airtel Africa, Raghunath Mandava 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.”
