A day after it said it was in talks with France’s Orange to sell its subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra leone, Bharti Airtel said it had no plans to exit Africa.
Responding to queries from FE, the company said, “We believe the proposed transaction along with our recent strategic divestment of towers will help us establish a sharper focus on remaining countries, significantly reduce debt and thereby give a boost to our aim of achieving net profit and free cash flow in Africa at the earliest. These countries currently represent a relatively small percentage of our overall Africa business. Airtel is well positioned in these remaining countries and there is significant growth upside available.”
Though the company declined to share the estimated valuation of the likely deal, analysts have pegged it around $1 billion.
On contribution from operations of the four countries, Bharti said, “As per the last disclosed information for the year ending March 31, 2014, total revenue for these four countries was about $730 million, which represented about 16% of our overall Africa revenue and about 5% of our global revenue.” The company’s net debt on March 31, 2015, was $10.7 billion.
According to a BNP Paribas research report, Bharti is among the top two operators in each of the four markets where it plans to sell off subsidiaries with subscriber shares of 43% in Chad, 21% in Sierra Leone, 38% in Burkina Faso and 46% in Congo Brazaville.