Cash positive Airtel Africa redeems $505m senior notes ahead due date

CASH POSITIVE AIRTEL Africa has dipped into its group level surpluses to complete payment of a $505 million 5.125 percent Guaranteed Senior Notes, a year ahead of its original due date of March 2023.

In a regulatory disclosure the telecommunications and mobile money services provider filed to the Nigerian Exchange (NGX), it also said the settlement includes all outstanding accrued interest up to the redemption date of 7 March 2022.

Airtel further revealed that the repayment includes: One-off costs of $17.6 million for the applicable premium which will be recorded within finance costs, while noting that the Group will save an aggregate of $26.5 million future interest payments from early redemption.

According to the statement, “Airtel Africa … confirms that it has completed the early repayment of its $505m 5.125% Guaranteed Senior Notes, originally due in March 2023, using cash balances available at Group level. The settlement includes all outstanding accrued interest up to the redemption date of 7 March 2022. One-off costs of $17.6m for the applicable premium will be recorded within finance costs, while the Group will save an aggregate of $26.5m future interest payments from early redemption.

“Since the time of the IPO in June 2019, Airtel Africa has successfully pursued a strategy of strengthening its balance sheet through both deleveraging and reducing US dollar debt exposure. Over this period the Group has reduced its USD HoldCo debt by $1.7bn and improved its leverage ratio to 1.4x net debt to underlying EBITDA at December 2021. Following this early repayment of Senior Notes, the Group has $1bn of bonds remaining at HoldCo level, due in May 2024,” the disclosure reads.

In another development, the wireless carrier announced that its Kenyan subsidiary, Airtel Kenya, has entered into an agreement with the Communications Authority of Kenya regarding its operating and spectrum licences, and received approval for the replacement of its temporary licence with a ten-year frequency licence for 2x10 MHz of spectrum in the 2100 MHz band.

The licencing alongside the fees come in respect for the settlement of its 2015-2025 operating and spectrum licence where the company will pay a total of $20 million in four instalments over the next three years while the 2x10 MHz licence for 2022-2032, will see the company pay a tenyear licence for $10 million.