The sale generated around US$175 million for Airtel, of which approximately $157.5 million is payable on the first closing date, expected to take place in the second half of the group’s current financial year.
The balance will be paid in instalments and around $60 million from the proceeds will be reinvested in network and sales infrastructure in Tanzania and for distribution to the country's government.
The Airtel Tanzania subsidiary will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the purchaser.
Airtel is also divesting tower assets in Chad, Gabon, Madagascar and Malawi.
The tower monetisation strategy was unveiled in November with Airtel Africa planning to sell 4,500 towers in total to lower corporate debts – reported at the time to be US$3.5 billion – while at the same time prepare for upcoming bond repayments.
In April, Airtel Africa agreed a new $500m loan facility with a group of relationship banks to partially refinance the group's €750m denominated bond ($879m) due 20 May 2021. This new loan facility established a standalone credit score for the group, requiring no parent guarantees from Bharti Airtel.
An instalment of $505 million due is in March 2023, based on Airtel’s annual report.
In its latest full year financial results – published 12 May – Airtel reported revenue growth of 14.2% to $3,908 million, with Q4 reported revenue growth of 15.4%.
Constant currency underlying revenue growth was 19.4%, with Q4 growth of 21.7%. Growth was recorded across all regions: Nigeria up 21.9%, East Africa up 23.5% and Francophone Africa up 10%; and across key services, with revenues for voice up 11.0%, data up 31.2% and mobile money up 35.5%.
There was an increase in net debt, however, leverage improved to 2.0x compared to 2.1x in March 2020. This was despite investing $247 million of intangible capex to renew licences in two of the largest markets, Nigeria and Uganda, and acquiring additional spectrum across other markets.
Airtel said the increase in underlying EBITDA "more than offset the increase in net debt".
Outgoing CEO Raghunath Mandava said of the financials: "The combination of bringing connectivity to underpenetrated mobile markets and improving financial inclusion through banking the unbanked, across our territories of operation, together provide us with a sizeable runway of sustainable profitable growth potential, and one we remain very confident of delivering."
Mandava will be succeeded by MD and CEO of Airtel Nigeria, Olusegun Ogunsanya, effective 1 October.
