Airtel to sell Kenya, Rwanda and Tanzania units citing sustained losses
Bharti Airtel, the parent company of Airtel Africa has finally
announced its in the process of exiting Kenya, Rwanda and Tanzania
markets citing sustained losses over the years hence depressing its
income from the continent.
In an interview with Indian Publication Economic Times, the telco’s
chairman said the three East African markets have been dragging down its
Africa operations.
According to analysts from American multinational investment banking
conglomerate Goldman Sach’s, the exits in these markets “and also
monetising more tower assets in five non-profitable markets would help
Bharti Airtel reduce leverage and boost margins in Africa.”
“Such asset sales could help Bharti reduce leverage further and
potentially help expand margins. The three countries where Bharti is
looking for exits/M&A options have margins significantly lower vs
the current Africa average”.
Goldman Sach’s was quoted by the Economic Times of India.
Particularly in Kenya, things have not been good for Airtel given that the telco business is largely dominated by Safaricom.
In its Full Year report, Bharti Airtel revealed that its Kenyan
business posted a loss of Ksh 8.1 billion as of December 2016 with
current liabilities standing at Ksh 55.3 billion against assets worth
Ksh 9.7 billion.
Ideally, the business is deeply in a negative position. Its total
debt load during the period grew to Ksh 44.3 billion ($429.62M).
In the same period, Airtel’s East Africa business that includes
Kenya, Tanzania & Rwanda posted a combined loss of Ksh19 billion
($181.2 million).
The Ugandan subsidiary is the only one that posted a profit of Sh4.5 billion ($44.9 million) over the period.
In the quarter ended September 2017, Bharti Airtel announced a profit
of $48 million in Africa from a loss of $91 million in a similar period
in 2016.
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