Nigeria: Starcomms Completes N12.2b Transaction With Swap Technologies
Starcomms has announced that it has successfully concluded a sale and leaseback agreement with Swap Technologies and Telecomms ("Swap") relating to 407 of its 557 Base Station Towers for a consideration of N12.2 billion ($81.4 million) in cash.
Under the terms of the transaction, Swap will take over the operation and maintenance of the passive aspects of the 407 towers. These towers comprise the physical structures as well as the power components, while the core network and radio components remain under Starcomms' ownership and control. The lease agreement is for an initial duration of 15 years, and allows Starcomms full access to the towers to operate its network.
Starcomms' CEO, Mr. Maher Qubain, said, "Sale and leaseback transactions such as this have become commonplace worldwide within the telecommunications sector. By leasing rather than owning these passive infrastructure network facilities, we can free up capital to fund additional growth, reduce debts and operational costs in the company, as well as allow management to focus on its core business."
"$67 million of the proceeds realized from the sale will be applied towards repayment of a sizable portion of the company's bank debts, thereby significantly strengthening the balance sheet of the company, while also reducing interest charges, and the balance of the US$14.4 million will be used to fund growth of the business," Qubain said.
Starcomms, a Nigerian-owned full-service telecommunications operator with an active subscriber base of 2 million, is the first and only telecommunications company to have its shares publicly listed and traded on the floor of the Nigerian Stock Exchange. Its network footprint covers 21 out of 36 states of the federation.
Incorporated in 2003, Swap has operational bases in Nigeria, Ghana and Cote d'Ivoire, providing integrated services to major operators in those countries.
"These are excellent towers and are concentrated in very strategic locations around the country. They will enable us provide a more extensive range of fully integrated service benefits as wireless communications continue to grow. We are proud to be associated with Starcomms, which is a recognized leader in the Nigerian telecommunications market," said Olatunde Titilayo, Swap's CEO, in a statement.