Airtel plans Africa stakes sales in bid to reduce debt, stay afloat

The Indian parent company of struggling mobile operator Airtel Kenya is set to sell stakes or merge some of its African units in a bid to stay afloat and reduce its debt burden.

Airtel Kenya said in a statement that it is “aware of Bharti Airtel’s consideration of stake sales or mergers to some of its Africa operations to cut debt as said by the chairman, Mr Sunil Bharti, during the World Economic Forum in Davos.”

Airtel has operations in 15 African markets including Nigeria, Kenya and Rwanda. It has struggled to crack the African market, forcing it to divest from some loss-­making countries such as Burkina Faso and Sierra Leone.

The statement attributed to Mr Bharti indicated that Airtel plans to reduce its footprint in Africa within a year.

A statement sent by the Airtel Africa corporate communications did not however disclose the specific countries that will be affected by the stale sales and mergers. It remains unclear whether the Kenyan unit will be affected.

“Mergers and acquisitions continue to be the norm for any multinational organisation and they affect all global organisations in equal measures as and when they happen,” said Airtel Africa managing director and chief executive Raghunath Mandava in a statement.

The telco added that divestments and sale of tower assets saw the firm, in the half­ year to September, reduce the losses from African operation to $91 million (Sh9.4 billion) compared to $170 million (Sh17.5 billion) during a similar period in 2015.

Exit Kenyan market

Last September, Airtel Kenya CEO Adil El Youssefi said his company could exit the Kenyan market if new regulations were not passed to curb what he termed as dominance by market leader Safaricom.

“We have been trying for over five years and have not made one dollar in profit. Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance,” said Mr Youssefi.

The Communications Authority of Kenya (CA) has contracted consulting firm Analysys Mason to probe the structure of the Kenyan telecoms market.

Airtel Kenya earlier this month announced the second staff retrenchment within a year, raising questions on the firm’s ability to mount a challenge on market leader Safaricom.

The telecommunications firm sent home 100 of its staff in what it termed a “strategic organisational restructuring to improve efficiency across function.”

The latest redundancy added to the 60 others that the telco let go in January 2016.

“The organisation sees an opportunity ahead to emerge with a broader reach and sharper execution,” said Mr Mandava.