Telecommunications giant, Airtel Africa, has announced the sale of assets to a Tanzanian joint venture company.
The transaction was disclosed in a notice filed with the exchange, announcing the first closing of the transaction, which is to sell its telecommunications tower assets in Tanzania to a joint venture company that is owned by a wholly-owned subsidiary of SBA Communications Corporation, and Paradigm Infrastructure Limited.
The transaction has been estimated to generate $176.1 million as gross consideration, of which $159 million has been paid, with the balance payable in installments upon the completion of the transfer of the remaining towers to the joint venture company, which is regarded as the purchaser.
As part of the terms, Airtel Africa’s subsidiary in Tanzania is expected to continue developing, maintaining, and operating its equipment on the towers under separate lease arrangements, largely made in local currencies, with the joint venture company.
According to the notice, $60 million 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, while the balance of the proceeds will be used to reduce debt at Group level.
According to the disclosure, SBA Communications Company is a leading global independent owner and operator of wireless communications infrastructure while Paradigm Infrastructure Limited, is a UK company focused on developing, owning, and operating shared passive wireless infrastructure in selected growth markets.