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Airtel Africa Reduces Foreign Debt By $450 Million

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Mobile telecom service provider, Airtel Africa has pruned down its debt to $550 million, a year earlier than the redemption date to its parent company, Bharti Airtel.

The mobile telecom operator which has its presence across 14 Africa countries, announced on Friday that out of its $1 billion loan indebted to Bharti Airtel International (Netherland) B. V. (‘BAIN’), it has redeemed up to $450 million (45 per cent of the total debt).

As of March 2022, Airtel Africa reported its full year audited account of 2021 with an external debt profile of $1 billion.

Notwithstanding, since the company went public in June 2019, it has since worked hard to reduce its dollar debt exposure. Over this period, the Group has reduced its USD HoldCo debt by $1.7bn and improved its leverage ratio to 1.3x net debt to underlying EBITDA as at 31 March 2022.

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The $1 billion loan constitute the intercompany loan owed to its parent company, Bharti Airtel International (Netherland) (BAIN). This consequently followed from redemption of $505 million bonds in March 2022 to its subsidiary company.

The statement issued on Friday reads “Further to our announcement of 22 June 2022, Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, today confirms the settlement of the previously announced cash tender offer to redeem up to $450m of the $1 billion of 5.35% Guaranteed Senior Notes due 2024 (‘Notes’) by its subsidiary Bharti Airtel International (Netherlands) B.V. (‘BAIN’).

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“An aggregate principal amount of $450 million of Notes have been accepted for purchase for a total of $462.6 million. All Notes accepted for purchase have been cancelled ahead of their maturity in May 2024. The original cap on the redemption of $300 million, as mentioned in the release of 22 June, was increased on July 6, 2022 as BAIN, in its sole discretion, decided to achieve a larger debt reduction through the use of cash resources. This early redemption has been made out of the Group’s cash reserves and is in line with our strategy of reduction of external foreign currency debt at Group level”.

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Patience Leonard, PBA Journalism Mentee
Patience Leonard, PBA Journalism Mentee
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