Bharti Airtel selling part of tower assets in Africa to HTA

Bharti Airtel is selling telecom tower assets in four countries in Africa to Helios Towers Africa (HTA), a firm owned by a consortium of investors including Africa-focused PE firm Helios Investment Partners and International Finance Corporation (IFC), for an undisclosed amount as part of its move to deleverage the balance sheet.

The company said on Wednesday that it is divesting 3,100 towers spread across four countries in Africa to focus on its core business and customers and reduce ongoing capital expenditure.

This is part of the overall strategy of the company to sell off its 15,000 towers to independent tower companies in the continent. Bharti Airtel has operations in 20 countries in Africa after snapping the assets of Kuwait’s Zain in the continent for $9 billion in 2010. It is yet to make profit from the African business and reported a 1.7 per cent sequential decline in revenues from the region with higher net loss in the quarter ended March 31, 2014.

“The agreement while allowing Airtel to focus on its core business and customers, would also enable it to deleverage through debt reduction, and will significantly reduce its ongoing capital expenditure on passive infrastructure," the company said.

Bharti Airtel, which operates through the Airtel brand, will have full access to the towers from HTA under a long-term lease contract.

According to the agreement the tower related personnel will also be transferred from Airtel to HTA.

“It is an important step towards the consolidation of tower assets across Africa that will drive industry-wide cost efficiencies through infrastructure sharing. The agreement will further help in accelerating the growth of telecom services in the continent and at the same time benefit the environment by avoiding duplication of infrastructure," said Manoj Kohli, chairman, Bharti Airtel International Netherlands BV.

HTA is an independent telecom tower company in Africa. The five-year-old firm is backed by Helios Investment Partners, Quantum Strategic Partners, Albright Capital Management, RIT Capital Partners besides IFC, the private sector investment arm of The World Bank.

It acquires, builds and manages telecom infrastructure and lease it to operators in Africa. HTA pioneered the sale-leaseback model in Africa, buying towers held by single operators and leasing them back to the seller and multiple other operators simultaneously.

The deal will almost push up its tower assets by around 66 per cent to 7,800 towers, making it the top independent telecom tower company focused exclusively on Africa. At present, HTA operates in Ghana, Tanzania and the Democratic Republic of Congo.

(Edited by Joby Puthuparampil Johnson)

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