(Bloomberg) -- Bharti Airtel Ltd. will pay the Tanzanian government 60 billion shillings ($26.2 million) over a period of five years to settle an ownership dispute.
The company will pay to the government 1 billion shillings every month for sixty months starting April 2019, Chairman Sunil Mittal said at a briefing in Tanzania's commercial hub, Dar es Salaam. The company will also pay the government a special divided at end of this year, Mittal said without mentioning the amount.
Mittal said that three of the seven members of the company's board, will be Tanzanian.
Airtel will also give the East African country $1 million to support development projects, President John Magufuli's communications director, Gerson Msigwa, said earlier Monday in an emailed statement.
The payments are part of a January deal in which Bharti agreed to reduce its stake in Airtel Tanzania to 51% from 60%, boosting the state's ownership of the company to 49%. A government inquiry ruled in 2018 that the privatization of Tanzania Telecommunications Corp. in 2005, in which Kuwait's Mobile Telecommunications Co. acquired a 60% stake, was illegal. Airtel acquired the stake in 2010 and said the purchase was in full compliance with Tanzanian law.
Other terms of the agreement include the company writing off debt of $407 million that Tanzania owed it, and that the state will appoint the entity's chairman, a government official said.
To contact the reporter on this story: Ken Karuri in Dar es Salaam at kkaruri@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Eric Ombok, Paul Richardson
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