Bharti Airtel has scrapped its proposed deal to sell telecom towers in Tanzania and Chad to Helios Towers Africa.
A statement issued to the Bombay Stock Exchange confirmed that “agreements for sale of tower assets in Tanzania and Chad have lapsed and therefore stand terminated”.
Selling off African assets was part of Bharti’s strategy to reduce debt and infrastructure CAPEX for its African operations, so the collapse of the deal will hinder this. Despite this, Bharti was not forthcoming about why exactly the sale had been scrapped.
Airtel’s wider plan for debt reduction involved selling 3100 telecom towers from four African nations – Chad, Tanzania, Democratic Republic of Congo and Republic of Congo – to Helios Towers for $400 million. Across the continent, Bharti has 15,000 towers.
While the deal has apparently collapsed for Tanzania and Chad because an agreement “couldn’t be tied up within a timeframe”, a sale is reportedly still “on for the other two countries”. The agreement was originally reached in July 2014, with Helios generating $630 million in funding.
Airtel is offloading a further 9,400 of its towers to American Tower Corp, Eaton and IHS. The operator has signed contracts with these firms that will allow it to use the infrastructure under a long-term lease.
The cost of maintaining its African towers has been driving down Airtel’s results, with its African unit failing to turn a profit since the operator first entered the market after acquiring Zain’s operation in the region. However, selling the entire tower unit to one bidder has proven difficult since the infrastructure is dispersed across so many different countries.