Airtel Africa, one of Afrika's largest telecommunications companies, has stated that it will divest its cellular tower infrastructure in all 14 regions where it provides internet and telecommunication services. Airtel, which has operations in the Democratic Republic of the Congo, Gabon, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Seychelles, Uganda, Tanzania, Zambia, Chad, and Congo Brazzaville, is looking to minimize its ownership of tower infrastructure, preferring to lease it instead at more attractive rates.
Its largest financier, the International Finance Corporation (IFC) claimed in an investment statement that Airtel is trying to focus on a cost-saving "asset-light business strategy" and has "divested most of its telecoms tower assets."
Helios Towers to buy Airtel towers in Malawi
Helios Towers alerted its stakeholders in February 2022 about ongoing agreements to buy Airtel Towers, as well as plans in the works to acquire further tower properties in Gabon.
Airtel Malawi issued a statement on March 25, 2022, announcing a record sale of tower assets to Helios Towers for $54,7 million.
Tanzania towers sale
Through a joint venture (JV) of two global telecommunication tower operators, Airtel Africa announced the selling of its tower infrastructure to SBA Communications Corporation and UK-based Paradigm Infrastructure Limited.
The transaction's total consideration is $176,1 million, according to Airtel Africa. Out of a total of $176.1 million, the JV has already paid Airtel Africa about $159 million. And this comes after the first portion of the transaction has been completed.
Record sale to Helios Towers in Madagascar
Airtel Africa sold its tower assets in Madagascar to Helios Towers for a record $51,7 million.
"The transaction will be worth $51.7 million in total. Under the terms of the agreement, the Group's Airtel Africa business will continue to build, maintain, and operate its equipment on the towers under separate leasing agreements with the purchaser, most of which will be made in local currencies " Airtel Africa stated.
The 12-year service agreement is estimated to generate $5 million in adjusted earnings before interest, taxes, depreciation, and amortization in the first full year of ownership, according to Helios Towers, with further growth predicted.
Balancing the books
“Airtel Africa currently maintains a limited number of strategic tower sites (approximately 2,500) across its business, and presently has no foreseeable plans to materially expand its owned towers portfolio,” wrote the IFC.
Airtel Africa's tower portfolio includes 1,229 towers in Madagascar and Malawi, as well as another 1,000 towers in Chad and Gabon.
The newest tower deals, according to Airtel Africa CEO Raghunath Mandava, "underline the company's successful execution of its asset monetisation agenda."
"Through long-term leases, which are predominantly payed in local currency by our operational businesses, these transactions will assist to enhance the mix of our debt and increase its tenor while decreasing the Group's foreign currency debt," Mandava added.
— By Bataung Qhotsokoane