Over the four markets Airtel has 2,227 existing sites and, upon completion, the deal will push Helios Towers to become the largest independent telecommunications infrastructure company in each of Malawi, Chad and Gabon.
The sale and lease back of the sites is part of Airtel Africa's focus on an asset-light business model.
Raghunath Mandava, CEO of Airtel Africa, commented: “With these latest tower transactions we continue to demonstrate strong execution of our asset monetisation programme. Helios Towers has been a partner to our business in some of the OPCOs for many years and we look forward to further expanding this partnership with these new leases as we together seek to improve mobile connectivity and infrastructure across Africa.
"These transactions will also help to improve the mix of our debt and increase its tenor through long term leases, which are largely payable in local currency by our operating entities, while reducing foreign currency debt of the group," he added.
In Madagascar and Malawi Airtel's tower portfolio comprises 1,229 towers. The transactions for these businesses will comprise a separate agreement for each jurisdiction and are subject to customary closing conditions and regulatory approvals.
Further, these two acquisitions are not inter-conditional and are expected to close in Q4. The gross consideration for this part of the deal is US$108 million and Helios said it represented an enterprise value of $124 million, including estimated transaction costs and capitalised ground leases for the group. These assets are expected to generate revenues of $38 million and Adjusted EBITDA of $13 million in the first full year of ownership.
Airtel Africa has also agreed to build to suit (BTS) commitments with Helios for an additional 195 sites across Madagascar and Malawi over the three years following completion, for a further $11 million.
Airtel Africa’s subsidiaries will continue to develop, maintain and operate their equipment on the towers under separate lease arrangements.
In Chad and Gabon, Helios has entered into MoU arrangements and, subject to obtaining a passive infrastructure licence in each country, is expected to complete the acquisition of Airtel Africa’s passive infrastructure assets "in or around Q1 2022". A deal value for these two markets has not been disclosed.
The purchased assets across all markets are expected to generate aggregated annualised revenues of $89 million and adjusted EBITDA of $27 million in the first full year of ownership.
Kash Pandya, CEO of Helios Towers said: "We are delighted to announce these acquisitions which, alongside the previously announced entry into Senegal, means we will deliver on our 2025 ambition to increase our operational presence to at least eight markets well ahead of schedule and represents a significant step towards our target of 12,000+ sites.
"Additionally, as a result of service contract structuring and market selection, our hard-currency revenues and adjusted EBITDA will improve further, providing enhanced future stability for the business and complimented by the 12-year service contracts with Airtel Africa. We look forward to strengthening our relationship with Airtel Africa and the other MNOs by delivering exceptional services levels in these markets over the coming years, driving the sustainable growth of communications across Africa."
