India’s Bharti Airtel has reportedly agreed to divest its 35% stake in Tanzania Telecommunications Company Limited (TTCL), allowing the telco to return to full government ownership.
Tanzania’s deputy communications minister, January Makamba, told…
India’s Bharti Airtel has reportedly agreed to divest its 35% stake in Tanzania Telecommunications Company Limited (TTCL), allowing the telco to return to full government ownership.
Tanzania’s deputy communications minister, January Makamba, told the national assembly over the weekend that Bharti’s decision to “surrender” its shares will enable the government to inject more funds into the telco, Tanzania Daily News reported.
Makamba dismissed media reports which had claimed TTCL was bankrupt, saying revenues grew considerably between 2010 and 2013.
Finance Minister Saada Mkuya Salum reportedly noted that the government has agreed to pay Bharti Airtel compensation for the divestment. The stake value has not been disclosed.
The communications ministry, Bharti and TTCL were not immediately available for comment.
Tanzanian authorities first engaged in talks to fully acquire TTCL, which provides mainly fixed-line, but also some mobile services, in 2010 to help turn the company around.
At the time, the 35% stake was still owned by Kuwait’s Zain, which later sold the asset to Bharti as part of the major US$10.7bn African deal between the two companies in June 2010.
Before that, in 2009, Tanzanian MPs had called on the government to bail out the telecoms incumbent, which needed some US$150m of fresh funds, representing nearly twice its US$80m debt level.
Tanzania and Bharti are also both shareholders in mobile operator Airtel Tanzania, split between 40% held by the government and the remaining 60% owned by the Indian giant.