The sale of Airtel Malawi’s telecommunications tower to London-based Helios Towers plc will help Airtel to improve and strengthen its connectivity in line with the company’s objective, the local communications company said on Monday.
“`Airtel Africa announced the first closing of the transaction to sell its telecommunications tower company in Malawi to the telecommunications infrastructure company on Friday last week.
The gross consideration for the transaction, according to an announcement by the telecommunications giant, which Business News has seen, is $55.6 million (about K15.79 billion).
One of Airtel towers that is part of the sale package
Under the terms of the transaction, Airtel Malawi will continue to develop, maintain and operate its equipment on the towers under separate lease arrangements, largely made in local currencies, with the purchaser.
Airtel Malawi plc managing director Charles Kamoto in a written response to a questionnaire said the sale of the telecommunications tower is, therefore, a positive step forward for the company.
“We are delighted to work with a partner such as Helios to help us to deliver increased connectivity and a positive impact to the communities we operate in. We are continuing to invest in Malawi, expanding our coverage and strengthening our network,” he said.
Meanwhile, according to Kamoto, the first closing of $50.6 million (about K14.37 billion) of the proceeds for the transaction has been paid and the balance will be payable upon completion of the transfer of the remaining towers to the purchaser.
In a joint statement by Airtel Africa and Helios Towers plc, the companies indicated that of the gross consideration for the transaction of $55 million, 20 percent is funded by Old Mutual Infrastructure Investment Trust Fund, representing a local Malawian shareholding of 20 percent in line with the local telecommunications infrastructure licence requirements previously disclosed.
Further to the sale, the two companies have also entered into a 12-year service agreement on the acquired assets, which are expected to deliver revenues of $23 million (about K6.53 billion) and adjusted earnings before interest, taxes, depreciation, and amortisation of $8 million (about K2.27 billion) in the first full year of ownership.
According to the telecommunications company, further growth is anticipated through 60 committed build-to-suits (scenario in which a developer provides a building that is built or refurbished to a tenant’s exact specification) over the next three years and colocation lease-up.
Airtel Malawi plc, which is listed on the Malawi Stock Exchange (MSE), currently has 839 750 705 shares in issue.
The company, whose share price is trading at K42, posted a profit-after-tax of K22 billion in the year ended December 31 2020, which was a 28 percent jump from K15.9 billion posted in 2019.
Meanwhile, the company is expecting its profit-after-tax for the year ended December 31 2021 to be approximately 35 percent higher than the profit reported in the previous corresponding period.“`