Airtel Africa announced on Friday that it has redeemed up to $450 million out of the $1 billion loan it owes to its subsidiary Bharti Airtel International (Netherlands) B.V. (‘BAIN’).
The loan represents intercompany loans owed to its parent company Bharti Airtel International. This also follows a $505m repayment of bonds in March 2022 to its HoldCo. The loan was repaid, one year earlier than their March 2023 redemption date.
Airtel’s decision to reduce its intercompany loans is driven by the growing risk exposure to foreign currency debts.
Further to our announcement of 22 June 2022, Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, today confirms the settlement of the previously announced cash tender offer to redeem up to $450m of the $1 billion of 5.35% Guaranteed Senior Notes due 2024 (‘Notes’) by its subsidiary Bharti Airtel International (Netherlands) B.V. (‘BAIN’).
An aggregate principal amount of $450m of Notes have been accepted for purchase for a total of $462.6m. All Notes accepted for purchase have been cancelled ahead of their maturity in May 2024. The original cap on the redemption of $300m, as mentioned in the release of 22 June, was increased on 6 July 2022 as BAIN, in its sole discretion, decided to achieve a larger debt reduction through the use of cash resources. This early redemption has been made out of the Group’s cash reserves and is in line with our strategy of reduction of external foreign currency debt at Group level
Airtel had an external debt profile of over $1 billion as of March 2022 when it reported its last full-year audited accounts. The company has since its IPO in June 2019, deleveraged its US dollar debt exposure. Over this period the Group has reduced its USD HoldCo debt by c.$1.7bn and improved its leverage ratio to 1.3x net debt to underlying EBITDA at 31 March 2022.