Airtel Africa raises $1.25 billion from SoftBank Group, 5 others

AIRTEL WILL USE THE FUNDS TO TRIM AIRTEL AFRICA LTD’S DEBT OF $5 BILLION AND TO EXPAND OPERATIONS THERE

NEW DELHI: Half a dozen marque investors including Warburg Pincus LLC, Temasek Holdings, Singapore Telecommunications Ltd and SoftBank Group International will invest a combined $1.25 billion in Bharti Airtel Ltd’s unit in Africa ahead of a potential initial public offering.

India’s second-largest mobile operator by users will use the funds to trim Airtel Africa Ltd’s debt of $5 billion and to expand operations there, Bharti Airtel said in a statement on Wednesday.

The six companies will make the investment by subscribing to new shares, it said.

Bharti Airtel did not identify two of the remaining investors. It also did not give any timeline for the investment.

The move kickstarts the process to monetise Airtel Africa in line with the strategy of Bharti Airtel to cut debt by monetising its assets.

Bharti Airtel wants to also boost its cash pile as it faces a brutal tariff war in India intensified with the entry of Reliance Jio Infocomm Ltd in September 2016.

As part of its steps to cut debt and monetise assets, Bharti Airtel in August sold a 20% stake in its satellite television arm, Bharti Telemedia Ltd, to private equity firm Warburg Pincus for $350 million.

The latest transaction will not involve any sale of existing shares, Bharti Airtel said.

It did not offer more details on the transaction.

ICICI Securities, in a research note on Wednesday, said Bharti Airtel has agreed to sell a 28.4% stake in the Africa unit to the six firms for $1.25 billion.