Telecommunications giants and leading provider of telecommunications and mobile money services, Airtel Africa on Wednesday announced the successful signing of a new $500 million loan facility with a group of relationship banks.
The creditors include a diverse group of existing global relationship banks, Bank of America, BNP Paribas, Citibank, HSBC, J.P. Morgan, Standard Chartered Bank and two Indian relationship banks, Axis Bank and Kotak Mahindra Bank.
The new committed facility consists of a combination of a revolving credit facility and term loans with tenure of up to 4 years.
The facility will be used to partially refinance the Group’s 750 million Euro-denominated bond (c.$880m) that is due 20 May 2021.
The balance of the Euro-denominated bond will be repaid with existing Group cash to reduce gross debt and associated interest costs.
The new loan facility further strengthens the core liquidity of the Group. It also has prepayment flexibilities that will allow the Group to optimise the efficiency of its capital structure with the free cash flows and cash receipts anticipated over the next 12 months following the recent announcements related to tower sales and mobile money minority investments.
In March, Airtel Africa also announced the signing of agreements to sell its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc, a leading independent telecommunications infrastructure company in Africa .
The Group’s tower portfolios in these two markets together comprise 1,229 towers which form part of the Group’s wireless telecommunications infrastructure network.
The Transactions, comprising two separate agreements, one in respect of each jurisdiction, are subject to customary closing conditions including required regulatory approvals and are not inter-conditional on each other. The Transactions are expected to close in or around calendar Q4 2021.
The aggregate gross consideration for the Transactions is expected to be approximately $108m. Under the terms of the Transactions, the Group’s Airtel Africa’s subsidiaries will continue to develop, maintain and operate their equipment on the towers under separate lease arrangements, largely made in local currencies, with the Purchaser.
As part of the transactions, the Group has agreed to build to suit commitments with the Purchaser for an additional 195 sites across Madagascar and Malawi over the three years following completion, for which a further $11 million of consideration is payable.
In addition, Airtel Africa has entered into exclusive Memorandum of Understanding agreements for the potential sale of its tower assets in Chad and Gabon to the Purchaser (the “Proposed Transactions”).
The Proposed Transactions are subject to the signing of definitive legal agreements for sale, including customary closing conditions such as required regulatory approvals.
It is envisaged that the Proposed Transactions will also incorporate lease arrangements with the Purchaser and build to suit commitments in Chad and Gabon.
The Proposed Transactions are not inter-conditional and are expected to close before the end of our fiscal year 2022.
The Group expects to disclose consideration details for the Proposed Transactions upon signing of the acquisition agreements in each market.
The Transactions and the Proposed Transactions are the latest strategic divestment of the Group’s tower portfolio as it focuses on an asset-light business model and on its core subscriber-facing operations.
The proceeds from the Transactions and the Proposed Transactions will be used to reduce Group external debt and to invest in network and sales infrastructure in the respective operating countries.
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