Comesa fines Malawi towers, other firms
The Common Market for Eastern and Southern Africa (Comesa) Competition Commission (CCC) has fined Malawi Towers Limited and two other firms $102 101.765 (about K82 million) for failure to notify the commission of their proposed acquisition transaction in time.
The other two firms are UK telecom infrastructure firm Helios Towers Limited and Madagascar Towers SA.
In a statement signed by the commission’s chairperson Brian Lingela and commissioner Ellen Ruparanganda, CCC said the parties failed to inform the commission of Helios Towers Limited’s intent to acquire shares in Malawi Towers Limited and Madagascar Towers SA.
Malawi Towers Limited is incorporated in Malawi and is a subsidiary of Bharti Airtel Malawi Holdings, a wholly-owned subsidiary of Bharti Airtel Africa.
It owns telecommunication infrastructure assets which are mainly used by Malawi Stock Exchange-listed Airtel Malawi plc to provide mobile telecommunication services to Airtel Malawi plc end-customers in Malawi.
Article 24 (1) of the Comesa Competition Regulations of 2004 requires a party to a notifiable merger to notify the commission in writing of the proposed merger as soon as it is practicable, but in no event later than 30 days of the parties’ decision to merge.
While the share sale and purchase agreement for the proposed transaction was signed on March 23 2021, the proposed merger was only communicated to the commission on July 2 2021 and not on April 22 2021 in accordance with the regulations.
The commission’s registrar Meti Disasa, while observing that the fine was the first of its kind for breach of the regulations, cautioned undertakings operating in the market to comply with the regulations, especially with respect to anti-competitive conduct.
She said: “The commission, therefore, wishes to remind undertakings in the common market to be cautious of the prescribed timeline for notifying mergers under Article 24 (1) of the Regulations.”
Madagascar Towers owns telecommunication infrastructure assets which are used mainly by Airtel Madagascar to provide mobile telecommunication services to Airtel Madagascar plc end-customers.
Airtel Africa plc sold its tower units in Madagascar and Malawi to Helios Towers plc for $108 million (about K89 billion) and inked separate pacts with the UK telecom infrastructure firm.
The funds would be used to reduce Airtel Group’s debt and invest in network and sales infrastructure in the respective operating countries.
Commenting on the transactions, Airtel Africa plc chief executive officer Raghunath Mandava told The Economic Times of India (https://economictimes.indiatimes.com) that the tower transactions underlined the company’s strong execution of its asset monetisation programme.
“These transactions will help to improve the mix of our debt and increase its tenor through long term leases, which are largely payable in local currency by our operating entities, while reducing foreign currency debt of the group,” he said.
Airtel Africa plc is the holding firm for Bharti Airtel’s operations in 14 countries in the region.
