Bharti sells 3,500 African masts to Eaton for $500 m

Written by fe Bureau | Mumbai | Updated: Sep 9 2014, 06:07am hrs
As part of its efforts to pare debt by offloading non-core assets, Bharti Airtel on Monday sold 3,500 telecom towers spread across six countries in Africa to Eaton Towers. This is the second such sale in the last two months, the first one being in July when it sold 3,100 towers across four African countries to Helios Towers. In both the cases, Bharti would be using the towers by entering into a 10-year lease agreement.

Though the company did not disclose the financial details, analysts estimate the value of the deal to be around $500-700 million. Prior to this, the deal with Helios was estimated to be around $400-500 million, so thus far Bharti would have netted around $1-1.25 billion from its tower divestment in Africa.

The company has a total of around 15,000 towers across 20 countries in Africa that came with its $9-billion acquisition of Zain in 2010. With Mondays deal with Eaton, 6,600 towers across 10 countries have been sold, while 8,000 spread over seven countries remain with it for which negotiations with prospective buyers are on. Of the remaining 8,000 towers, the bulk around 5,000 are in Nigeria and is likely to fetch it another $1 billion, while the remaining 3,000 are in smaller regions and would command lower valuations.

Bharti has targeted to net around $2.5 billion from its tower sales in Africa and sources said that talks are on course.

Bharti has earlier raised funds through dollar- and euro-denominated bonds to refinance and repay its debt. Last year in May it even sold a 5% stake to Doha-based Qatar Foundation Endowment (QFE) for around R6,800 crore by issuing over 199.87 million new shares.

The agreements will allow Airtel to focus on its core business and customers, enable it to deleverage through debt reduction, and will significantly reduce its ongoing capital expenditure on passive infrastructure, the company said in a statement.

The agreement with Eaton Towers...will lead to far superior utilisation of passive infrastructure and help drive the proliferation of affordable mobile services across Africa, said Manoj Kohli, chairman, Bharti Airtel International Netherlands.

This is a transformational deal which gives Eaton Towers the most diversified tower portfolio across Africa, said Alan Harper, CEO of Eaton Towers.

Bharti, which bought Kuwaiti telecom group Zain's African operations in 2010, is yet to turn it around. Its net debt as on June 30 stood at R60,472.40 crore, according to Bloomberg data. On Monday the Bharti Airtel share closed up 0.66 % at R403.20 on the BSE.