Dec 9, 2022

Mawazo Writing Africa

Writing about the main

Airtel Africa recalls bonds, sells towers

Airtel Africa Plc has recalled US$505 million in debt and sold telecom towers in Malawi, Madagascar and Tanzania for a combined price of US$284 million, as part of nearly US$3 billion in debt reduction efforts US dollars on its balance sheet, weighing on its balance sheet continental business.

By calling a bond issue, a company repays the principal and interest on a debt instrument before its due date or maturity. This happens when the issuer (borrower) intends to pay off the debt from its books and save on the regular interest payments.

The telecom company, a subsidiary of India’s Bharti Airtel Ltd, which operates in 14 African countries has redeemed the bonds, which were scheduled to mature in March 2023, saving $26 million in interest payments from the prepayment.

“In line with our strategy, the holding company’s foreign currency debt continues to grow “We also redeemed $505 million of the Notes in March 2022, one year ahead of their March 2023 redemption date,” the company said in its financial statements for the year ended March 31, 2022.

” Our balance sheet has also been further de-risked by continued localization of our debt in the operating companies (OpCos) and significant deleveraging in the holding company (Ho ldCo).”

Following the early redemption of the bonds at a rate of 5.125 percent, the group now has only $1 billion of bonds remaining at the holding company level, maturing in May 2024 .

In 2019, the telecom company raised $750 million through an initial public offering (IPO) and used the net proceeds from the issuance of new shares to pay off a portion of its $4 billion debt. “During this period, the Group reduced its debt by $1.7 billion and reduced its leverage ratio to 1.3 times net debt to underlying earnings before interest, taxes, depreciation and amortization (EBITDA) as of March 31 Improved in 2022.”

< p>The group completed the sale of more than 2,600 telecom towers in Tanzania, Madagascar and Malawi, raising total proceeds of US$284 million, used to partially pay off its US$3.5 billion debt US$ was used to US$2.9 billion.

Proceeds from the tower sale were: Tanzania (US$177 million), Malawi (US$55 million) and Madagascar (US$52 million -dollars).

The group recorded a profit of US$111 million from the tower sales, but the loss of tower sharing revenue as a result of the sale of those towers amounted to US$29 million -dollars per year.

The group, which has 128.4 million customers h at, intends to sell more shares to the public through an IPO in three years and sell more telecom towers in Chad and Gabon. In March 2021, the Group announced letters of intent with Helios Towers for the potential sale of its tower assets in Chad and Gabon.

In February 2022, Airtel Africa announced that it had agreed to an extension of its letter of intent agreement with Helios Towers in Gabon, with completion pending Helios Towers receiving a passive infrastructure license.

The memorandum of understanding on tower assets in Chad expired in February 2022 and Airtel Africa and Helios Towers have signed agreed not to be renewed.

Group net income increased 82 percent to $755 million from $415 million a year ago.

Total group revenues increased 21 percent to $4.71 billion $3.88 billion, with voice, data and mobile money contributing 50 percent, 32.3 percent and 11.7 percent of total revenue, respectively

Operating cash flow rose 40 percent to 1.65 million arden of $1.17 billion, while financial expenses declined five sports to $403 million from $423 million in the same period.

Nigeria’s operations contributed 39.8 percent ($1.87 billion) of the group’s total revenue, followed by East Africa with 57.2 million customers at 36.4 percent ($1.71 billion). while Francophone Africa contributed 24 percent ($1.13 billion).

On March 7, Airtel Africa announced that its Kenyan subsidiary, Airtel Kenya Networks Ltd, had entered into agreements with the Communications Authority of Kenya regarding its operations and Spectrum Licenses , and obtained approval to replace its temporary license with a 10-year spectrum license for 2 x 10 MHz spectrum in the 2100 MHz band.

Regarding agreements on operating and spectrum licenses for 2015-2025 Airtel Kenya will pay a total of US$20 million in four installments over the next three years, while Airtel Kenya has agreed in relation to the 2x10MHz license (2022-32) and a 10-year $10 million license >

“This $30 million in equipment reflects our continued confidence in the tremendous opportunity the Kenyan market offers,” the telecom company said.