Bharti Airtel insists it has no plans to exit Africa, despite holding exclusive talks with Orange over the sale of four of its units in the continent.
Orange announced late on Monday it was in discussions to acquire subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone from Airtel, with a Q4 2015 target to complete the deal.
News of the talks triggered market speculation that this could be Airtel’s first steps towards a complete African exit, in a region where it has struggled to turn a profit since acquiring Kuwaiti operator Zain’s assets in 15 countries in 2010.
Airtel has since poured cold water on the speculation, stating to Reuters that potential sale of the four units represents a small percentage of its overall African business, and the move would help it “establish a sharper focus” on its other units in the region.
Burkina Faso, Chad, Congo Brazzaville and Sierra Leone accounted for approximately 16 per cent of Airtel’s African revenue in the 2014 fiscal year, and a sale should help the company cut its net debt burden, which stood at $10.7 billion in March. According to sources, a potential deal between Airtel and Orange could be worth up to $1 billion.
“We remain fully committed to our African operations and will continue to invest in its growth and building a profitable business and accordingly have no plan to exit,” the company said in a statement to Reuters.
In addition to the four countries it is in talks to exit now, the company has already raised $1.3 billion for the sale of tower assets in the region.
Orange told Mobile World Live all the units it is after operate in the number one or two position in their respective markets, representing a combined nine million customers and €600 million in turnover a year.
The company declined to comment on whether it will pursue additional Airtel subsidiaries in the future.