Airtel to use $1.7 bn of tower sale proceeds to retire debt

That's 60% of the firm's total tower base, proceeds to go towards reducing its debt

Bharti Airtel has completed the sale of 8,300 mobile towers in seven African countries for $1.7 billion (Rs 11,000 crore). The company will use the proceeds from the sale to reduce its debt.

“As on date, we have completed the sale transactions in seven countries for approximately 8,300 towers representing close to 60 per cent of the total tower base,” Airtel said in a statement.

The total value of proceeds from all the concluded transactions in these seven countries is over $1.7 billion and is being utilised for reducing the debt of the company, the statement added.

TOWERING NUMBERS

• Airtel to reduce debt, which at the end of financial year 2014-15 stood at over $10.67 bn
• Has about 15,000 towers in Africa that are in the process of being sold
• The agreements to sell mobile towers have lapsed in four countries while the process is on in two countries, rest of the towers will also be disposed over a period of time
• Bharti Airtel's Africa business is running into losses since the company entered the region in 2010
• In June this year, Bharti terminated its agreement with Helios Towers Africa for the sale of tower assets in Tanzania and Chad

The company has decided to exit the tower business in Africa, where it has about 15,000 towers in total.

Airtel is the process of divesting 15,000 towers in 13 countries in Africa to different companies and it has operations across 17 countries in Africa.

The agreements to sell mobile towers have lapsed in four countries, while the process is on in two countries, the company said.

Bharti Airtel's Africa business has been running into losses since the company entered Africa in 2010. For the fourth quarter ended March 31, 2015, its Africa revenue declined 12.6 per cent year-on-year, while net loss widened to $183 million.

The company’s net debt at the end of 2014-15 stood at $10.67 billion. In June this year, Bharti Airtel terminated its agreement with Helios Towers Africa (HTA) for the sale of tower assets in Tanzania and Chad.

In July last year, the firm had announced it would divest 3,100 telecom tower assets to Helios Towers Africa for sale in four countries including Democratic Republic of Congo, Republic of Congo, Chad and Tanzania.

The divestment would expand HTA’s tower coverage in Africa to around 7,800 towers.

Both the companies decided to terminate the deal in Tanzania and Chad comprising 800 towers, while the deal for Democratic Republic of Congo and Republic of Congo remain.