Bharti sells tower arm stake for ~3,325 cr

Business Standard - - FRONT PAGE - KI­RAN RATHEE

Bharti Air­tel has di­vested 83 mil­lion shares, com­pris­ing 4.49 per cent stake, in tower sub­sidiary Bharti In­fratel to raise ~3,325 crore.

This is to pri­mar­ily be used to pare debt as the coun­try’s largest tele­com op­er­a­tor by mar­ket share tries to strengthen it­self to fight com­pe­ti­tion from Re­liance Jio and the IdeaVoda­fone com­bine.

This is the third such sale of shares by Air­tel in its tower unit this year. It wants the money to delever­age its bal­ance sheet and in­vest in in­fra­struc­ture to up­grade its fourth-gen­er­a­tion tech­nol­ogy (4G) ca­pa­bil­ity. Con­sol­i­dated debt as on end-Septem­ber was ~91,480 crore.

Af­ter the lat­est trans­ac­tion, Bharti Air­tel and its wholly owned sub­sidiaries to­gether have eq­uity of 53.51 per cent (it was ear­lier 58 per cent) in Bharti In­fratel, the com­pany stated. The sale was done by Air­tel via a wholly-owned sub­sidiary, Net­tle In­fra­struc­ture In­vest­ments.

Bharti Air­tel re­cently had made clear it was open to sale of its con­trol­ling stake in Bharti In­fratel. It had been ap­proached by some re­puted global in­vestors, it re­cently dis­closed; no de­ci­sion had been taken in this re­gard. Last year, the board of di­rec­tors year had con­sti­tuted a sub-com­mit­tee to eval­u­ate a stake sale in Bharti In­fratel.

Fol­low­ing which, shares were sold to a group of pri­vate eq­uity in­vestors and via Qual­i­fied In­sti­tu­tional Place­ment.

The board has au­tho­rised the com­pany to con­tinue eval­u­at­ing and, if found fea­si­ble, to sell shares in Bharti In­fratel in one or more tranches from Air­tel or sub­sidiary Net­tle.

In­fratel’s shares have surged this year, al­low­ing Air­tel to profit on eq­uity sale as it looks to cre­ate a war chest for in­vest­ment. It has raised its ear­lier in­vest­ment fore­cast for the cur­rent fi­nan­cial year to ~25,000 crore, from the ear­lier stated ~20,000 crore.

A ma­jor­ity of the in­vest­ments are go­ing into build­ing of in­fra­struc­ture for 4G ca­pa­bil­i­ties. In­dus­try watch­ers says the Voda­fone-Idea Cel­lu­lar merger is likely to be com­plete by the first half of next year. This, with Re­liance Jio, will give im­mense com­pe­ti­tion to Air­tel.

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