The Government of Ghana, Bharti Airtel (Airtel), and Millicom International Cellular S. A. (Millicom) (through their respective subsidiaries) have announced that the definitive agreement for the transfer of ‘AirtelTigo’ (Airtel Ghana and Millicom Ghana) to the Government of Ghana on a going concern basis has been signed. The Ghanaian government would buy all of AirtelTigo’s shares, as well as all of its clients, properties, and liabilities, under the proposed agreement.
According to the agreement, the deal will include a smooth acquisition by the Ghanaian government, after which AirtelTigo will become a State body and function as such.
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The unsustainable non-controlled JV will be handed over to the GoG, who are committed to reviving the business by making appropriate investments and operating it while safeguarding the interests of the company’s clients, workers, and other stakeholders. The deal is conditional on the mutually agreed-upon terms being met, and Airtel, Millicom, and GoG will work quickly to complete it.
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A Battered Presence In Ghana
In 2017, Airtel and Millicom combined their Ghana operations, creating the country’s second-largest mobile carrier.
The regulator approved the merger on the condition that the Ghana government have the ability to purchase a share in the new company in the future.
Airtel has previously stated that in markets where it is not among the top two players, it would consider acquisition options, including exit.
AirtelTigo is a joint venture between ‘Airtel’ and ‘Millicom’ wherein Airtel holds a non-controlling 49.95% share in AirtelTigo. But the joint venture has fallen behind MTN and Vodacom in the West African country.
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According to Airtel’s quarterly results ending September 30, 2020 the company’s Ghana operations had 5.1 million customers. Over the past four years, the company has been losing money, and Earnings Before Interest, Taxes, Depreciation, and Amortization (Ebidta) for the quarter dropped to $1.1m from $1.3m in the previous quarter ending June 30. During the quarter, overall revenue remained unchanged at $15m, and data customers as a percentage of total customers fell to 56.2 percent from 59.4 percent in the previous quarter.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
Airtel leaves Ghana Airtel leaves Ghana