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Airtel Africa recalls bonds, sells towers

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By JAMES ANYANZWA

Airtel Africa Plc has recalled $505 million bonds and bought off telecommunication towers in Malawi, Madagascar and Tanzania for a complete consideration of $284 million as a part of measures to repay near $3 billion debt on its steadiness sheet that’s weighing down its continental operations.

By recalling a bond, a agency pays off the principal quantity and the curiosity of a debt instrument earlier than the due or maturity date. This happens the place the issuer (borrower) intends to clear the debt from its books and save on the common curiosity funds.

The telco, a subsidiary of India’s Bharti Airtel Ltd, which has operations in 14 African international locations, redeemed the bonds that had been to mature in March 2023 saving $26 million on curiosity funds from the early redemption.

“Consistent with our technique to proceed to cut back international forex debt at holding firm, we additionally repaid $505 million bonds in March 2022, a yr sooner than their March 2023 redemption date,” the corporate says in its monetary statements for the yr ended March 31, 2022.

“Our steadiness sheet has additionally been additional de-risked by continued localisation of our debt into the working firms (OpCos) and materials debt discount in Holding Firm (HoldCo).”

Following the early reimbursement of the bonds priced at 5.125 p.c, the Group now has solely $1 billion of bonds remaining at Holding Firm degree which are due in Might 2024.

Commercial

In 2019, the telco raised $750 million by means of an preliminary public providing (IPO) and used the online proceeds from the problem of recent shares to retire a part of the $4 billion debt. “Over this era the Group has decreased its debt by $1.7 billion and improved its leverage ratio to 1.3x web debt to underlying earnings earlier than curiosity, taxes, depreciation, and amortisation (EBITDA) at March 31, 2022.”

The Group accomplished the sale of greater than 2,600 telecommunication towers in Tanzania, Madagascar and Malawi producing complete proceeds of $284 million which had been used to partially scale back its debt to $2.9 billion from $3.5 billion.

Tower sale proceeds had been: Tanzania ($177 million), Malawi ($55m) and Madagascar ($52m).

The Group recorded a achieve of $111 million from the tower gross sales however the lack of tower sharing income on account of the sale of those towers amounted to $29 million each year.

The Group which has 128.4 million clients is seeking to promote extra shares to the general public by means of an IPO in three years and promote extra telecommunication towers in Chad and Gabon. In March 2021, the Group introduced memorandum of understanding preparations with Helios Towers for the potential sale of its tower belongings in Chad and Gabon.

In February 2022, Airtel Africa introduced it had agreed an extension to their memorandum of understanding with Helios Towers in Gabon, with completion nonetheless topic to Helios Towers acquiring a passive infrastructure licence.

The MoU regarding tower belongings in Chad expired February 2022, and Airtel Africa and Helios Towers mutually agreed that this could not be renewed.

The Group’s web revenue for the yr elevated by 82 p.c to $755 million from $415 million final yr.

The Group’s complete revenues elevated by 21 p.c to $4.71 billion from $3.88 billion with voice, information and cellular cash contributing 50 p.c, 32.3 p.c and 11.7 p.c to the general high line respectively

It’s working money stream elevated by 40 p.c to $1.65 billion from $1.17 billion whereas finance prices declined 5 p.c to $403 million from $423 million in the identical interval.

Nigeria’s operations contributed 39.8 p.c ($1.87 billion) to the general Group income, adopted by East Africa which has 57.2 million clients at 36.4 p.c ($1.71 billion) whereas Francophone Africa contributed 24 p.c ($1.13 billion).

On March 7, Airtel Africa introduced that its Kenya subsidiary, Airtel Kenya Networks Ltd had entered into agreements with the Communications Authority of Kenya concerning its working and spectrum licences, and obtained approval for the substitute of its momentary licence with a 10-year frequency licence for 2×10 MHz of spectrum within the 2100 MHz Band.

In respect of agreements concerning 2015-2025 working and spectrum licences, Airtel Kenya can pay a complete of $20 million in 4 instalments over the subsequent three years whereas in in respect of the 2×10 MHz licence (2022-32), Airtel Kenya has agreed and paid for a 10-year licence for $10 million.

“This $30 million funding displays our continued confidence within the super alternative inherent within the Kenya market,” the telco mentioned.

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