Airtel moves to sell stakes in Kenya, Rwanda and Tanzania over 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.