After Nigerian sale, Bharti to sell towers in Brazil to ATC

Bharti Airtel Ltd, India's biggest telecom operator, has struck a deal to sell its towers across Nigeria and Brazil to American Tower Corp. (ATC) in two separate deals for more than $2.2 billion (Rs13,614 crore).

Under the first deal announced yesterday, it announced the sale to 4,800 wireless towers in Nigeria for around $1.2 billion. (See: Bharti Airtel sells 4,800 towers in Nigeria to American Tower)

In the second deal announced today, Bharti Airtel agreed to sell 6,480 transmission sites in Brazil to American Tower for another about $1.2 billion.

Airtel and American Tower expect to close the deals during the first half of 2015, subject to customary closing conditions and regulatory approval.

"We are pleased to announce the launch of our operations in Nigeria while expanding our relationship with Airtel, one of the leading multinational operators in the world," said Jim Taiclet, chairman, president and CEO of American Tower.

"With the largest population and economy in Africa and relatively underdeveloped wireless infrastructure, we view Nigeria as a tremendous growth opportunity. Further, we expect this investment to support our long-term objective of generating double-digit AFFO per share growth for our stockholders," he added.

Commenting on the sale, Christian de Faria, MD and CEO of Bharti Airtel Africa, said, "Nigeria is the largest mobile market in Africa and a key one for Airtel. This agreement, which is part of our stated philosophy of promoting infrastructure sharing, will provide us with considerable cost efficiencies and at the same time allows us to sharpen our focus on the customer."

The latest deal comes after Airtel agreed to sell more than 3,500 mobile phone masts in six African nations to Eaton Towers for a reported $800 million, (See: Airtel divests African telecom tower assets to Eaton Towers)  and around 3,100 masts in four African countries to Helios Towers Africa for an undisclosed sum.

These divestures will allow Airtel to reduce debt of Rs60,541.6 crore, and will significantly reduce its on-going capital expenditure on passive infrastructure.

Airtel, also the world's fourth largest telecom operator, has been trying to sell its tower assets in Africa for some time, but has been unable to clinch a deal.

Airtel had entered the African market in 2010 after acquiring Zain Telecom for $10.7 billion. The company now offers services in 17 African countries, but is yet to show a profit in a market which is very different from India's, where Bharti cut its teeth.

In order to reduce debt, the company has also been raising money through foreign currency bonds. Last month, it raised around $2 billion in a dual currency international bond sale. And in March this year, the company had raised around Rs2,453.2 crore through issue of bonds in the Swiss market.

In December 2013, the Sunil Mittal-led firm had raised €750 million (about Rs6,350 crore) in the first such bond issue by an corporate and received bids worth €3.8 billion. The company than re-opened the issue in January and raised €250 million.

Airtel Africa witnessed 2 per cent growth in revenues for the fourth quarter of FY 14, with revenues at $1.14 billion.

At the same time, net loss for the region widened to $124 million as compared to a loss of $91 million in the corresponding quarter last year.

Founded in 1995, Boston, Massachusetts-based ATC is the largest independent owner, operator and developer of wireless and broadcast communications real estate, with a portfolio of approximately 56,000 properties, including wireless towers, broadcast towers and Distributed Antenna System (DAS) networks.

Its tower portfolio consists of nearly 23,000 towers in the US and over 33,000 towers internationally in Brazil, Chile, Colombia, Germany, Ghana, India, Mexico, Peru, South Africa and Uganda.

It also has 300 DAS networks that it operates in malls, casinos, other in-building applications, and select outdoor environments.

In 2010, ATC acquired Essar Telecom Infrastructure, one of India's largest independent mobile mast companies with 4,500 towers, in a $430 million deal.