Airtel, an African telecommunication company, closed the first part of selling tower assets to a joint venture company in Tanzania. This transaction will see the transfer of approximately 1400 mobile sites to the joint venture company.
The transaction, which was concluded today, is valued at $176 million, and $159 million has already been paid, with the rest to be settled in instalments after the transfer of all the tower assets.
Airtel’s tower assets were acquired by SBA Communications Corp and Paradigm Infrastructure Limited, of which SBA Communications Corp serves as the majority owner.
SBA Communications Corp is a leading independent company that owns and operates wireless communications infrastructure in the U.S, Canada, Central American, South America, and South Africa.
Paradigm Infrastructure Limited, on the other hand, is a newer company. It is a UK-based company that specialises in the development, ownership, and operation of shared passive wireless infrastructure in emerging areas. The company has tower assets in the United States, Brazil, Mexico, Argentina, Chile, Colombia, Costa Rica, Paraguay, and France and operates in Nigeria, South Africa, Ghana, Uganda, and Germany.
As part of the agreement, Airtel Africa’s Tanzanian affiliate will continue developing, maintaining, and operating its equipment on the tower assets based on a separate lease deal. The lease deal was made in the country’s local currency with the joint venture company.
Also, the money from the transaction is to minimise debt at the Group level, settle the Tanzanian government, and about $60 million will be set aside for network investment in Tanzania. This is under the Airtel Africa IPO Prospectus document published in 2019.
In November 2020, Airtel Africa sold towers to some African markets to reduce its $3.5 billion debt. The towers are located in five Africa countries: Tanzania, Madagascar, Chad, Gabon, and Malawi. According to the report, the towers will be leased back to Airtel after the sale.
Chief Executive Officer (CEO) of Airtel Africa Plc, Raghunath Mandava, said, “We are constantly seeking to bring down our debt, and we prefer to bring it down even faster with the tower deals”.
From the firm’s annual report, Airtel has a payment of $890 million due in May, with an instalment of $505 million due in March 2023.