Helios PE-backed firm to acquire Airtel’s towers in Madagascar, Malawi

 Helios PE-backed firm to acquire Airtel’s towers in Madagascar, Malawi

A UK-listed African telecom tower group that is backed by private equity firm Helios Investments has signed a deal to buy Airtel Africa plc’s telecommunications tower companies in Madagascar and Malawi.

Airtel Africa, a unit of Indian mobile-phone operator Bharti Airtel Ltd, has agreed to sell 1,229 towers in the two countries to Helios Towers plc. The deal is worth around $108 million, and is likely to close in or around October-December 2021.

Airtel Africa has a presence in 14 countries across the continent. As per the agreement, 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 Helios Towers.

In addition, Airtel Africa has agreed to build towers to suit commitments with Helios Towers at an additional 195 sites in the two countries. It will construct the towers over three years following completion of the deal and receive an additional $11 million.

Airtel Africa has also entered into exclusive agreements for the potential sale of its tower assets in Chad and Gabon to Helios Towers.  These transactions will also incorporate lease arrangements with the buyer and build-to-suit commitments in the two countries. These proposed transactions are expected to close by March 2021. These two markets have around 1,000 towers.

These moves are the latest divestments by Airtel Africa as it focusses on an asset-light business model and on its core subscriber-facing operations.

Raghunath Mandava, CEO of Airtel Africa, said the deals are part of the company’s asset monetisation programme. “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.”

Helios Towers was formed in December 2009 by private equity firm Helios Investments and a group of investors including Soros Strategic Partners LP, RIT Capital Partners plc, Lord Rothschild’s family interests, and Albright Capital Management.

Helios Investments initially held a 28.6% in the company. The stake diluted over time and shrunk to 12.4% after the tower company’s initial public offering in October 2019 on the London Stock Exchange.

Helios Towers has grown through a mix of organic and inorganic expansion moves, starting with an acquisition in Ghana in 2010. The transaction with Millicom gave it an opening fleet of 831 towers.

These were rapidly followed in 2011 by a further 1,721 towers acquired in Tanzania and the Democratic Republic of Congo (DRC). The next two years saw it construct build-to-suit towers in Tanzania and close a deal with Vodacom in 2014 in the same country.

Helios Towers entered its fourth country, Congo Brazzaville, in 2015 with the acquisition of towers from Airtel. The following year it also acquired operations from Airtel in DRC. Over the next three years it also bought assets in Tanzania (Zantel, Viettel) and South Africa (SA Towers).

Vivek Sinha

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