A portion of the $1 billion loan Airtel Africa owes
to its parent company Bharti Airtel International (Netherlands) B.V. ('BAIN')
has been redeemed, according to an announcement from the company.
Following the most recent disclosure, Airtel Africa
confirmed the completion of the previously disclosed cash tender offer by its
subsidiary Bharti Airtel International (Netherlands) B.V. ('BAIN') to redeem up
to $450 million of the $1 billion in 5.35 percent Guaranteed Senior Notes due
2024 (the "Notes").
“All Notes accepted for purchase have been cancelled
ahead of their maturity in May 2024. The original cap on the redemption of
$300m, as mentioned in the release of 22 June, was increased on 6 July 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,” the company said.
Notes with a total principal amount of $450 million
have been approved for purchase, amounting to $462.6 million. Prior to reaching
maturity in May 2024, all Notes that were approved for purchase have been
The debt comprises intercompany debt owed to Bharti
Airtel International, the parent company. Additionally, this comes after a $505
million bond repayment to its HoldCo in March 2022. The loan was paid off one
year before the original due date of March 2023.
Airtel Africa completed the repayment of its $505
million senior secured notes earlier in March. The company claimed in a
regulatory statement that it repaid the loan, which wasn't set to mature until
March 7th, 2023, using cash balances available at the group level.
The total amount of interest accrued up to the
redemption date of March 7, 2022, is included in the settlement, according to
the filing. Airtel Africa's corporate disclosure said that the Group will
save a total of $26.5 million in future interest payments from early
redemption, while one-time charges of $17.6 million for the appropriate premium
will be included under finance costs.
As of March 2022, when it filed its most recent full
year of audited finances, Airtel had an external debt profile of more than $1
billion. The company has reduced its exposure to US currency debt since its IPO
in June 2019, according to Nairametrics. The Group has improved its leverage
ratio throughout this time, bringing it to 1.3x net debt to underlying EBITDA
at 31 March 2022, while reducing its USD HoldCo debt by approximately $1.7
One of Africa's largest telecommunication companies
is Airtel Africa Plc. The business operates in 14 African nations, including
Nigeria where, in June 2019, it made an Initial Public Offering (IPO), becoming
the second telecom business to do so on the Nigerian Exchange. According
to news reports, on January 31, 2022, the company had surpassed Dangote
Cement Plc, which is majority-owned by Aliko Dangote, the richest man in
Africa, to become the highest capitalized company in Nigeria.