India's largest cellular services provider Bharti Airtel Ltd through its arm Bharti Airtel International (Netherlands) BV has signed an agreement to sell its operations in Burkina Faso and Sierra Leone to France-based telecommunication group Orange, according to a press release.
Bharti had inked an exclusive agreement with Orange in July last year for divesting operations in African countries namely Burkina Faso, Sierra Leone, Chad and Congo. The agreements for the remaining two countries have lapsed.
As per the agreement, Orange will acquire 100 per cent share capital of Airtel's two companies in these two countries. The consolidated revenue of the two firms is around €275 million.
The acquisitions will be implemented in partnership with Orange's subsidiaries in Cote d'Ivoire and Senegal.
Further, Airtel said the outlay for Orange for these transactions will be based on the financials of its two subsidiaries for the year ended March 31, 2016 and will represent equivalent of 7.9 times Airtel's EBITDA in these two countries at this time.
The deals, however, are subject to approval by the competent authorities.
Airtel had entered the African market in 2010 after acquiring Zain Telecom's business in the continent for about $10.7 billion, in the second-biggest overseas buy by an Indian firm. The company now offers services in 17 African countries but is yet to turn profitable.
For Orange, the proposed deal would expand its geographical spread. Currently it is present in 29 countries with a customer base of 247 million, including 188 million mobile customers and 16 million fixed broadband customers.
“Through this deal, Orange will reinforce its presence in Africa with two additional countries, adding almost 5.5 million customers to its mobile customer base. This acquisition marks a step forward in Orange's growth strategy and will enhance the group’s African footprint up to 20 countries in 2016.
Lazard and Socit Gnrale were advisors to Orange for this transaction. Airtel was advised by Arma Partners LLP.