S&P says Airtel will garner $900 mn from African sale
14 January 2016
Bharti Airtel will receive about $900 million from sale of its operations in Burkina Faso and Sierra Leone in Africa to France's Orange, Standard and Poor's Ratings Services today said in an estimate.
The rating of Bharti Airtel, however, is unaffected by the company's plan to sell its operations, it clarified.
"We estimate that Bharti will receive about $900 million in sale proceeds when the sale is completed in fiscal 2017 (year ending March 31)," it said.
The ratings agency said the plan reflects Bharti's deleveraging measures and should help marginally reduce the company's leverage. "Nevertheless, Bharti's financial ratios will remain in line with our expectations for the rating," it said in a statement.
"We expect the sale to help raise the company's ratio of funds from operations to debt by 100 basis points to about 25 per cent in fiscal 2017. This is under the assumption that Bharti undertakes $1 billion each of additional deleveraging measures and spectrum purchases by March 2017."
The ratings agency's view is based on its expectations that the entry of Reliance Jio in the next three months won't significantly erode Bharti's competitive position or profitability.
"We have determined, based solely on the developments described herein, that no rating actions are currently warranted. Only a rating committee may determine a rating action and, as these developments were not viewed as material to the ratings, neither they nor this report were reviewed by a rating committee," it added. (See: Orange to buy two of Airtel's African operations).