Airtel sells 10.3% in Bharti Infratel to KKR, CPPIB for `6,193 cr

BHARTI AIRTEL has sold 10.3 per cent stake in its mobile tower arm Bharti Infratel to a consortium of KKR and Canada Pension Plan Investment Board for Rs 6,193.9 crore.

The transaction marks KKR’S second investment in Infratel, the telecom operator said. KKR invested in the tower firm in 2008 and sold its 2.5 percent stake in 2015. The deal will leave Bharti’s stake in Infratel at 61.7 per cent, with the remainder owned by a slew of fund managers, including Fidelity Management & Research Company and Aberdeen Asset Management.

“The successful completion of the secondary sale of over 190 million shares of its subsidiary Bharti Infratel Limited representing 10.3 per cent to a consortium of funds advised by KKR and Canada Pension Plan Investment Board (CPPIB) for total consideration of over Rs 6,193.9 crore executed at a price of Rs 325 per share,” Bharti Airtel said in a statement. Bharti Airtel will use the proceeds from this sale primarily to reduce debt.

Following the closure of this transaction, the equity holding of KKR and CPPIB in Infratel will be at 10.3 per cent, the statement said. “This investment by a consortium of marque long-term investors underlines confidence of the global investors in India’s growth story and the government’s Digital India initiative. It further reinforces the positive outlook for the telecom infrastructure sector,” said Sunil Bharti Mittal, chairman, Bharti Airtel. “The long-term investment horizon of the investors aligns well with the capital needs and business cycles of Bharti Infratel.”

Earlier this month, Britain’s Vodafone Group and Idea Cellular agreed to merge their Indian operations in a $23 billion deal, and said they would look to sell their mobile tower businesses. Reliance Communications had said Competition Commission approved its sale of a 51 per cent stake in its tower assets to Canada’s Brookfield Infrastructure Group for Rs 10,000 crore ($1.54 billion).

More acquisitions are likely in the mobile tower business, as wireless providers seek to exit the business in order to reduce high debt levels and focus on their core businesses, analysts said.