Bharti Airtel says no plan to exit Africa, despite Orange talks

Thursday, 23 July 2015 00:00 - - {{hitsCtrl.values.hits}}

Bharti Airtel Ltd., the biggest Indian cell phone carrier, has no plans to exit Africa, it said on Tuesday, despite announcing exclusive talks with France’s Orange to sell four of its units there.

Orange said on Monday it was in discussions to buy Bharti subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone, triggering market speculation that this might be a first step towards a complete Bharti exit.

But the Indian group said on Tuesday that the operations put on the block represented a relatively small percentage of its overall Africa business. A sale, it said, would help it ‘establish a sharper focus’ on the remaining countries.

“We remain fully committed to our Africa 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, in response to a query from Reuters.

Bharti ventured into Africa in 2010 with the $ 9 billion purchase of Kuwaiti telecom Zain’s cellular assets in 15 countries, at a time when growth in its home market had started slowing and a price war was hurting carriers.

But high costs of operations there squeezed margins, meaning Bharti has yet to turn a profit in Africa.

The sale of operations in four countries, which accounted for around 16% of its African revenue in the 2014 fiscal year, should also help Bharti cut down a net debt burden of $ 10.7 billion as of March. Bharti’s debt had been swollen by the Africa buy.

Bharti Airtel’s stock rose as much as 5.4% on Tuesday to its highest since October 2009 as analysts said a possible Africa exit could lead to a re-rating of the stock.

Bharti is also selling its mobile phone masts in several African countries, again to cut down debt. It has so far raised $ 1.3 billion from the sale in five countries.