Will Bharti AirtelBSE 1.54 % be involved in a potential consolidation in Nigeria, its largest Africa market? Analysts say a consolidation opportunity may arise in the market amid reports that efforts are underway to find a buyer for the country’s troubled fourth-largest carrier, Etisalat Nigeria.
“Nigeria is Bharti’s largest Africa market where a potential consolidation opportunity is arising with Etisalat Nigeria looking for buyers after having failed to service debt obligations,” said Bank of America Merrill Lynch in a note to clients, a copy of which was seen by ET. Nigeria generates 30% of Bharti Airtel’s Africa revenues.
The US brokerage, further, said that “it remains to be seen if Bharti explores a Ghana market equivalent joint venture opportunity” in Nigeria, although it does not specifically name potential JV partners.
The latest consolidation buzz in Nigeria comes less than a fortnight after the country’s central bank and its telecom regulator reportedly intervened to save Etisalat Nigeria from collapsing after the telco’s talks with local banks to renegotiate a $1.2 billion loan came a cropper.
Etisalat Nigeria has reportedly been a victim of dollar shortages plaguing the country due to lower oil prices and economic recession that has left the company struggling to make repayments to lenders and suppliers.
In January, Bharti Airtel chairman Sunil Mittal had said the telco would consider mergers or stake sales of some of its African assets within a year as part of a rationalisation exercise, especially where it’s not in the top two positions, in an attempt to cut its mammoth $14 billion-plus debt and turn operations profitable.
