Bharti Airtel’s board on Wednesday cleared the sale of its Ghana joint venture – AirtelTigo – to the government in the African country, and is taking an impairment charge of Rs184.1 crore for the transaction.
“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 on Wednesday.
The proposed deal would result in the government of Ghana acquiring 100% shares of Airtel Ghana Ltd, also known as AirtelTigo, 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.
Airtel had merged its Ghana operations with Millicom in 2017, resulting in the second largest mobile carrier in the country. The merger was approved by the regulator subject to the condition that African country’s government will have the option to pick up a stake in the new entity in future.
But the joint venture has fallen behind MTN and Vodacom in the country. Airtel has previously said that it will look at consolidation opportunities, including exit, in markets where it is not among the top two players.
According to the quarterly results ending September 30, Airtel said its Ghana operations had a customer base of 5.1 million. The company has successively been posting losses for the past four quarters and the Ebidta 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.