In a move to reduce debt in its Africa operations, Bharti Airtel is selling 1,100 towers in Zambia and Rwanda to IHS Holding Limited, the company has informed BSE. The agreements were conducted through Bharti Airtel International (Netherlands) BV, as per which Airtel will sell and lease back over 1100 towers from IHS in Zambia and Rwanda under a 10-year renewable contract . The deal value wasn’t disclosed, however a The Economic Times report pegs the value of the deal to be Rs 2,000 crore with each tower valued at Rs 1.5-2 crore.
This is the fourth such deal in five months as Airtel is looking to cut its debt from the loss making continent. In November, Airtel sold 4,800 towers in Nigeria to the American Tower Corporation for $1.05 billion. In September, Airtel sold 3500 towers to Eaton Towers in six African nations, and in July it sold 3100 towers in four countries to Helios Towers Africa. The Helios Towers deal was valued at $2 billion. At the time, it was reported that Airtel was chalking out similar deals for the remaining 12,900 it has in Africa.
Airtel Africa CEO Christian De Faria in an earnings conference call said the company’s voice revenue and overall growth suffered because of the Nigerian Communications Commission (NCC)’s ban on conducting sales promotions in Nigeria. Faria added that over the last 12 months Airtel Africa has invested significantly in infrastructure especially around data, in the brand, in the distribution network, and in creating new platforms.
Bharti Airtel, the country’s top telecommunications operator, entered Africa in 2010 by acquiring local telecom operators for $9 billion, funded by debt.
It is also interesting to note that Bharti Airtel International has already tapped the overseas bond market twice for funds to refinance its $9 billion debt. The company concluded one of the largest overseas bond issues this year earlier in May, raising $1 billion in dollar-denominated bonds and 750 million euros in euro-denominated bonds and earlier in March, raised CHF (Swiss Francs) 350 million. Typically during refinancing, a company will replace an existing loan with new favourable terms.
