Airtel Africa sells 1,400 towers for $175m in Tanzania Subsidiary
Airtel Africa Plc has announced the sale of the tower portfolio of its subsidiary in Tanzania to SBA Communications Corporation and Paradigm Infrastructure Limited.
The transaction which is approximately $175million, with $157.5million payable on the first closing deal expected to take place in the second half of the year.
According to a statement on Wednesday by Simon O’Hara, its Company Secretary, said the deal is a strategic divestment of Airtel’s tower portfolio in its effort to focus on asset-light business model.
The Group added that the tower portfolio which comprises approximately 1,400 towers in its subsidiary in Tanzani would see Airtel Tanzania continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the Purchaser.
The statement reads, “Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, today announces the sale of the tower portfolio belonging to Airtel Tanzania to a joint venture company owned by a wholly-owned subsidiary of SBA Communications Corporation, a leading global independent owner and operator of wireless communications infrastructure, as majority owner, and by Paradigm Infrastructure Limited, a UK company focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets.
“The tower portfolio in Airtel Tanzania comprises approximately 1,400 towers which form part of the Group’s wireless telecommunications infrastructure network. Under the terms of the Transaction, the Group’s subsidiary Airtel Tanzania plc will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the Purchaser.”
Airtel added that, “The Transaction is 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 consideration for the Transaction is approximately $175m, of which approximately $157.5m is payable on the first closing date (which is expected to take place in the second half of the Group’s current financial year) with the balance payable in instalments upon the completion of the transfer of any remaining towers to the Purchaser. Around $60m from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the Government of Tanzania, as per the settlement described in the Airtel Africa IPO Prospectus document published in June 2019. The balance of the proceeds will be used to reduce debt at Group level.”
Recall that in the last quarter of 2020, the Telecom company had agreed to sell up to 4,500 telecommunication towers across five (5) African countries to reduce its $3.5 billion debt and aid the impending repayment of bonds.
It listed Gabon, Chad and Malawi, Tanzania and Madagascar as countries on the continent where its towers would be sold-off.
According to its erstwhile Managing Director and Chief Executive Officer, Raghunath Mandava, said that the telecom company was looking to cut down accumulated debts through its tower sales.
SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 33,000 communications sites in fourteen markets throughout the Americas and South Africa, SBA is listed on NASDAQ under the symbol SBAC. SBA is part of the S&P 500 and is one of the top 20 Real Estate Investment Trusts (REITs) based on market capitalization.
Paradigm Infrastructure Limited is a UK company focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets. Founded in 2019, Paradigm’s executive and management team bring together significant industry experience in starting up operations, managing and growing successful businesses in the TowerCo sector. This includes the establishment of new tower companies in Nigeria, South Africa, Ghana, Uganda, Germany, Brazil, Mexico, Chile, Columbia and Paraguay, along with the operational management of over 90,000 tower sites across EMEA, LatAm and the USA. The team also has been responsible for the management of significant build programs.
