Bharti Airtel terminates tower sales agreement in Africa
18 Jun 2015
Bharti Airtel, the world's fourth-largest operator by subscribers, has terminated an agreement to sell its tower assets in Tanzania and Tchad to Helios Towers Africa (HTA).
The agreement was terminated after it lapsed, Bharti Airtel said in a regulatory statement.
On 9 July 2014, Bharti Airtel had entered into an agreement to sell its 3,100 telecom towers to HTA. The Indian company expected this to help in reducing debt and ongoing capital expenditure. However, the financial details of the agreement were not disclosed.
Post the transaction, HTA would have owned a total of 7,800 towers, making it the largest independent tower company in Africa. At present, HTA operates in Ghana, Tanzania and the Democratic Republic of Congo.
The agreement, according to a statement issued by Bharti Airtel last year, would help in driving industry-wide cost efficiencies through infrastructure sharing. It would also 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.
This was also part of Bharti Airtel's overall strategy to sell-off 15,000 towers to a clutch of independent tower companies. While the companies did not disclose the deal size, `the industry had pegged the deal at about $2-2.5 billion.
Under the agrement, Airtel would have had full access to HTA's towers under a long-term lease, Bharti Airtel said in the statement.
HTA, a company promoted by a number of investors has been operational since 2009. Helios Investment Partners, Quantum Strategic Partners, Albright Capital Management, RIT Capital Partners and the International Finance Corporation are the investors in the company.
Under the agreement, Airtel had also agreed to transfer personnel involved with the tower operations to HTA, it had said.
The deal, while allowing Airtel to focus on its core business and customers, would have also enabled it to deleverage through debt reduction, and significantly reduce its ongoing capital expenditure on passive infrastructure.
The agreement was subject to statutory and regulatory approvals in the respective countries. (See: Bharti Airtel close to clinching $2-3bn deal for sale of its African towers).