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Airtel Africa on Wednesday announced the sale of the tower portfolio belonging to Airtel Tanzania to a joint venture company of SBA Communications Corporation and Paradigm Infrastructure for $175 million.

SBA Communications Corporation is a global independent owner and operator of wireless communications infrastructure while paradigm infrastructure is a UK company focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets.

The tower portfolio in Airtel Tanzania comprises around 1,400 towers which form part of the Group's wireless telecommunications infrastructure network. Under the terms of the transaction, the Group's subsidiary Airtel Tanzania plc will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the purchaser, said a company statement

It added that the transaction is the latest strategic divestment of the Group's tower portfolio as it focusses on an asset-light business model and on its core subscriber-facing operations.

Out of the total consideration of $175 million for the transaction, around $157.5 million is payable on the first closing date, which is expected to take place in the second half of the Group's current financial year, with the balance payable in installments upon the completion of the transfer of any remaining towers to the purchaser.

"Around $60m from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the Government of Tanzania, as per the settlement described in the Airtel Africa IPO Prospectus document published in June 2019," it said.

The balance of the proceeds will be used to reduce debt at group level, said the company.