Airtel Africa Plc. has announced the signing of the agreement to sell its tower companies in Madagascar and Malawi to Helios Towers Plc.
The telecom giant announced the agreement in a statement dated 23 March 2021, sent to the Nigerian Stock Exchange.
Airtel’s owns 1,229 towers in these two markets and they form part of the company’s telecommunications infrastructure network. The value of these assets as of 31st March 2020 was $93.7 million and the assets exclusively generated a year to 31 March 2020 profit before tax of $3.3 million.
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Helios Towers Plc is a leading independent telecommunications infrastructure company in Africa with major presence in Ghana, Congo B, DRC, Tanzania, Senegal and South Africa.
The agreed consideration for the transaction is expected to be approximately $108m and the transaction is expected to be closed in or around October to December 2021.
Details of the transaction
- Two separate agreements were made for the two jurisdictions and are subject to customary closing conditions which include regulatory approval.
- Until completion of the transactions, Airtel will continue to develop, maintain and operate their equipment in the towers under a lease agreement with Helios.
- The lease agreement will be separate from the sale agreement and payments will be made in local currencies by Airtel’s operating entities in the jurisdiction.
- Airtel will build additional 195 sites across Madagascar and Malawi over the 3 years following completion of the transaction for a further payment of $11 million.
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Besides the agreement to sell the towers in Madagascar and Malawi to Helios, Airtel also entered into an exclusive Memorandum of Understanding for the potential sale of its 1,000 tower assets in Chad and Gabon. It is expected that the transaction would be treated in a similar fashion to the agreement for the sale of Madagascar and Malawi tower assets. The proposed sale of the assets in the two countries will not be inter-conditional and are expected to close before the end of 2022.
Airtel disclosed through the press statement that proceeds from the transactions and the proposed transaction will be used to reduce its external debt and invest in network and sales infrastructure in its respective operating countries.
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The CEO of Airtel Africa, Raghunath Mandava commenting on the transaction said that the Group will continue to demonstrate strong execution of its asset monetisation programme and that they look forward to expanding their partnership with Helios with the new leases, as they work together on improving mobile connectivity and infrastructure across Africa.
He also stated that the transactions will help to improve the Group’s debt and increase its tenor through the long leases entered, which are largely payable in local currency by the operating entities while reducing the foreign currency debt of the Group.