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Bharti Airtel To Sell Africa Towers To Kill Debt, Deal Could Rake In $3 Bn

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Bharti Airtel is poised to conclude a much-anticipated deal to sell its towers in Africa in seven days, which could help the world’s fourth-largest telecom operator rake in as much as $3 billion and help reduce debt.

The Sunil Mittal-headed company has already shortlisted buyers from among four tower companies — Helios Towers Africa, IHS, American Tower Corp and Eaton Towers — for the sale, two people familiar with the matter told ET, without elaborating.

“Up to $2 billion of the sale proceeds will be used to retire debt, helping improve the company’s margins and result in higher profit before tax,” one of the people said, adding that profit before tax could easily be boosted by close to $100 million. The rest will be used for capital expenditure.

Bharti Airtel’s net debt at the end of 2013-14 stood at Rs 60,541.6 crore ($10.4 billion), which would come down following the tower sale, thereby reducing the stress on the company’s balance sheet. Over the past year or so, the company has been refinancing large parts of its debt pile by issuing overseas bonds, helping it to lower its net finance payouts.

While the sale will help the company focus on its core business of offering telecom services, the tower companies in the fray will get to expand their footprint in a continent where large parts are still under-penetrated and offer strong growth potential. Original post at The Economic Times

Wahengbam Rorrkychand

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