Airtel Africa to sell Tanzania telecom towers to Nasdaq-listed SBA, Paradigm

 Airtel Africa to sell Tanzania telecom towers to Nasdaq-listed SBA, Paradigm

SBA Communications, a Nasdaq-listed real estate investment trust with exposure to wireless infrastructure, and a UK firm created by former ATC executives have signed a deal to buy Airtel Africa plc’s telecommunications tower companies in Tanzania.

Airtel Africa, a unit of Indian mobile-phone operator Bharti Airtel Ltd, said Wednesday it has agreed to sell 1,440 towers in the country in a deal worth around $175 million.

SBA will own the majority stake in the target while Paradigm Infrastructure, the company formed by former executives at American telecom tower group ATC, will own the balance.

Of the total, $157.5 million is payable on the first closing date. The balance amount will be payable in instalments upon the completion of the transfer of any remaining towers.

Around $60 million from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the government of Tanzania, as per a pre-agreed settlement. The remaining proceeds will be used to reduce debt.

Under the terms of the transaction, Airtel’s Tanzania arm will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the two buyers.

The transaction is the latest strategic divestment of the group’s tower portfolio as it focusses on an asset-light business model and on its core subscriber-facing operations.

Earlier this year, a UK-listed African telecom tower group that is backed by private equity firm Helios Investments signed a deal to buy Airtel Africa’s tower companies in Madagascar and Malawi.

Airtel Africa has a presence in 14 countries across the continent. It has also entered into agreements for the sale of its tower assets in Chad and Gabon to Helios Towers. These two markets have around 1,000 towers.

Vivek Sinha

The Capital Quest