Bharti could raise up to $2 bln from Africa towers sale

DUBAI Thu Jan 23, 2014 9:45pm IST

The Bharti Airtel office building is pictured in Gurgaon, on the outskirts of New Delhi, July 30, 2013. REUTERS/Mansi Thapliyal/Files

The Bharti Airtel office building is pictured in Gurgaon, on the outskirts of New Delhi, July 30, 2013.

Credit: Reuters/Mansi Thapliyal/Files

Related Topics

Stocks

   

DUBAI (Reuters) - Bharti Airtel (BRTI.NS) plans to sell most of its transmitter towers in Africa, in a process that could raise up to $2 billion for the country's top telecom operator and help reduce its debt.

Bharti, which entered Africa with the $9 billion acquisition of Kuwaiti telecom group Zain's (ZAIN.KW) operations on the continent in 2010, has already launched a sale process for its towers in Nigeria, two banking sources familiar with the process said.

Building and maintaining mobile towers in Africa is typically more expensive than in other regions, because of security costs and electricity shortages that often require towers to be powered by generators, while new roads may need to be built to reach rural areas.

This has prompted operators to seek to sell or lease towers to specialist firms such as Eaton Towers, Helios Towers Africa, American Tower Corp (AMT.N) and IHS (IHS.LG).

Several telecom operators have already offloaded some of their towers, such as South Africa's MTN (MTNJ.J), which in December agreed to sell 1,228 towers in Rwanda and Zambia to Lagos-listed IHS.

"While other telecom operators have sought to offload towers in Africa due to the inherent difficulty in operating them, Bharti has the added reason of reducing their debt burden, most of which was taken up for the Zain acquisition," one of the banking sources said.

The company had net debt of 638.4 billion Indian rupees on March 31 2013.

"As a company policy, we do not comment on market speculation," a Bharti spokesman said.

The source said Bharti plans to split up the sale in different countries and hold separate negotiations with potential buyers.

"Tower sale deals are always difficult to execute. This is an ongoing process and they would have done a great job if they can sell most of it," the source said.

Media this week carried reports referring to Bharti's tower sale. The company acquired Zain's operations in 15 African countries, including Kenya and Ghana.

Both the sources, who spoke on condition of anonymity as the matter is not public, said Bharti had not hired any financial advisers for the sale.

Mobile penetration in Africa is relatively low and a prime attraction for tower companies is to build new towers to reach the significant part of the continent's populace that does not yet own a phone, as well as meet subscribers' rising demand for extra mobile services such as Internet connectivity.

OTHER SELLERS

Bharti is Nigeria's No.3 operator with a 19 percent share of mobile subscribers, according to data from the industry regulator, and some of its rival operators in Africa's most populous country are also planning tower sales.

Etisalat Nigeria, a unit of the United Arab Emirates' Etisalat ETEL.AD, has appointed South Africa's Standard Bank as adviser and market leader MTN is another potential seller, but Bharti's sale appears the most advanced.

Prospective buyers are in the midst of conducting diligence, the sources said, and whichever operator sells first will have considerable first-mover advantage.

Etisalat Nigeria is estimated to have around 2,500 towers in Nigeria, Bharti 6,000 and MTN 9,000.

The Indian firm has no fixed deadline for offers, although it is expected to choose a winning bidder in the first half of 2014, the sources added.

(Reporting by Dinesh Nair and Matt Smith in Dubai; Editing by Erica Billingham and Mark Potter)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage