Bharti Airtel's subsidiary sells tower portfolio in Tanzania for $175 mn

Airtel Africa on Wednesday announced the sale of the tower portfolio belonging to Airtel Tanzania for about USD 175 million (Rs 1,279.6 crore).

The deal marks the latest strategic divestment of the group's tower portfolio as it focuses on an asset-light business model and on its core subscriber-facing operations, the company said.

Airtel Africa is a provider of telecommunications and mobile money services with a presence in 14 countries across Africa.

In a statement, Airtel Africa announced "the sale of the tower portfolio belonging to Airtel Tanzania to a joint venture company owned by a wholly-owned subsidiary of SBA Communications Corporation, a leading global independent owner and operator of wireless communications infrastructure, as majority owner, and by Paradigm Infrastructure Limited, a UK company focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets".

The tower portfolio in Airtel Tanzania comprises about 1,400 towers that form part of the group's wireless telecommunications infrastructure network.

As per the terms of the deal, the group's subsidiary Airtel Tanzania will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the purchaser.

Airtel said the consideration for the transaction is about USD 175 million of which approximately USD 157.5 million is payable on the first closing date (expected to take place in the second half of the Group's current financial year).

The balance is payable in instalments on the completion of the transfer of any remaining towers to the purchaser, it added.

"Around USD 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," the statement said.

The rest of the proceeds will be used to reduce debt at the group level, it informed.