Helios Towers PLC announced it has signed agreements with Airtel Africa PLC to acquire its telecommunications tower companies in Madagascar, Malawi, Chad and Gabon.
The London-based telecom tower infrastructure company said it has inked two separate agreements, with the first covering the Madagascar and Malawi acquisitions for USD108 million.
The second agreement is a memorandum of understanding for the potential Chad and Gabon acquisitions. The Madagascar and Malawi purchases are expected to close during the fourth quarter of 2021, while the Chad and Gabon acquisitions are predicted to close in the first quarter of 2022.
Under the transaction terms, Airtel Africa's subsidiaries will continue to develop, maintain and operate their equipment on the 2,227 existing sites across the four countries under separate lease arrangements with Helios.
Airtel Africa has also agreed to build to suit commitments with Helios for an additional 195 sites across Madagascar and Malawi over the three years following completion, for which a further USD11 million is payable.
Airtel Africa said the proceeds from all transactions will be used to reduce group external debt and to invest in network and sales infrastructure in the respective operating countries. Its Malawian operating company is expected to obtain a 20% local Malawian shareholding, which will be maintained during the term of Helios' operating licence in the country.
Helios said the transactions assets are expected to generate aggregated annualised revenue of USD89 million and adjusted earnings before interest, tax, depreciation and amortisation of USD27 million in the first full year of ownership. It intends to finance the transactions through its existing cash and debt facilities.
"Helios Towers has been a partner to our business in some of the OPCOs for many years and we look forward to further expanding this partnership with these new leases as we together seek to improve mobile connectivity and infrastructure across Africa. 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," said Airtel Africa Chief Executive Raghunath Mandava.
Shares in Helios Towers were up 1.5% at 161.40 pence, while shares in Airtel Africa were up 0.4% at 84.50p in London on Tuesday.