Airtel Africa Plc – the parent company of Airtel Nigeria Plc, has concluded plans to sell about 4,500 telecommunication towers across 5 countries including Tanzania and Madagascar to help reduce $3.5 billion of debt and prepare for looming bond repayments.
Africa’s second-largest carrier by subscribers, with headquarters in London, is also disposing of cellular masts in Gabon, Malawi, and Chad.
This disclosure was made by the Chief Executive Officer (CEO) of Airtel Africa Plc, Raghunath Mandava, during an interview.
Mandava said, “We are constantly seeking to bring down our debt, and we prefer to bring it down even faster with the tower deals.’’
According to the annual report of the telecoms firm, Airtel has a repayment of 750 million euros ($890 million) due in May, while an installment of $505 million is due in March 2023.
The CEO pointed out that the company, which was spun off from India’s Bharti Airtel Ltd last year and is listed on the London Stock Exchange and the Nigeria Stock Exchange, used the proceeds of the dual Initial Public Offering (IPO) to help reduce its debts to $3.5 billion from about $7.7 billion. The outstanding balance includes $1.8 billion of bonds that have cross-default clauses, with Bharti Airtel still its biggest shareholder.
However, Mandava disclosed that Airtel Africa Plc plans to lease back the towers from the successful buyers.
The stock has declined by 18% since the June 2019 IPO, valuing the company at 2.4 billion pounds ($3.1 billion).
A number of the continent’s wireless carriers have been selling similar tower assets to specialist operators, opting to save on maintenance costs, allay security concerns, and bypass shortfalls in power and road infrastructure.
What you should know
Nairametrics had reported that its competitor, MTN Group, plans to sell its 29% stake in IHS Towers, a telecoms infrastructure and service provider. The African biggest carrier also generated about $812 million in assets that included sales of its tower holdings in Ghana and Uganda to American Towers Inc.
Meanwhile, the need for additional masts in Africa is increasing, as millions more adopt smartphones and faster broadband is needed.
The CEO also said that many of Airtel Africa’s 14 markets border each other, making it easier to roll out fibre even during the COVID-19 pandemic. The company has added 9,000 kilometres (5,592 miles) of cable this year, bringing the total to 47,000 kilometres.
He said, “Our focus is to grow in the countries that we are in.’’