India's Bharti Airtel is in exclusive talks to sell four of its African units to France's Orange for up to a reported $1 billion.
The company announced it has entered an agreement to pursue the possible sale of Airtel subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone to Orange, but cautioned that there's no guarantee a sale will take place.
The Economic Times, citing sources, said the company is seeking a valuation of between $900 million and $1 billion for the four units, which earned a combined ebitda of nearly $180 million during the financial year ending in March.
Airtel bought into Africa with the acquisition of Zain's mobile operators in 15 countries back in 2010 for $9 billion plus $1.7 billion in debt, and has since expanded to another two countries on the continent.
But its African operations have long been a drain on the company's profitability - the company reported a $183 million loss from Africa during the March quarter alone, while revenue fell by 12.6% despite a nearly 10% year-on-year increase in subscribers.
The company has already been busy selling its tower portfolios in various African nations, including a $1.3 billion sale of towers in five nations to American Tower Corp, which closed earlier this month.
Orange has its own operations in 19 nations across Africa, and the four subsidiaries up for sale are in francophone countries, making them a good fit for the operator.