Reliable sources had hinted that Bharti Airtel’s exit had been in the works for sometime now.
“The parties are in advance stages of discussions for conclusion of the commercial agreement for the transfer of AirtelTigo on a going concern basis to the government of Ghana,” Airtel said in a statement to the Bombay Stock Exchange in India on Tuesday evening [October 27, 2020].
The deal means that the Ghanaian government would be owning 100% of shares of the venture which is Airtel Ghana Limited, also known as AirtelTigo – this comes along with all its customers, assets and agreed liabilities.
“Accordingly, Airtel is voluntarily taking an impairment charge of Rs 1,841 million (Rs 184 crore),” the statement added.
AirtelTigo is a joint venture between ‘Airtel’ and ‘Millicom’ wherein Airtel holds a non-controlling 49.95% share in AirtelTigo.
In 2017, Airtel had merged its Ghana operations with Millicom, making it the second largest mobile operator in the country.
The merger was approved by the regulator subject to the condition that the Ghana government will have the option to pick up a stake in the new entity in future.
However, the joint venture appears to have fallen behind those of MTN and Vodafone in Ghana.
The company had previously stated that it was open to consolidation opportunities, including exit, in markets where it is not ranked among the top two players.
The company’s quarterly report ending September 30 showed that Airtel Ghana had a customer base of 5.1 million.
The company has however been recording losses for the past four quarters and the EBITDA for the quarter fell to Rs 8.8 crore from Rs 9.9 crore in the previous quarter ending June 30.
Total revenue remained stagnant at Rs 118 crore during the quarter and data customers as a percentage of the total customer base also saw a dip to 56.2% during the period from 59.4% in the June quarter.
Bharti Airtel’s Africa operations clocked in a net profit of $88 million for the second quarter this fiscal, down 8.3% on-year, hurt by higher net finance costs.
But consolidated revenue stood at $965 million, increasing 14.3% from corresponding quarter last year.
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