Bharti Airtel forced to cut back on debt
BHARTI Airtel, India’s largest cellphone operator, is considering mergers or stake sales at some of its Africa operations as it looks to cut debt and make its biggest overseas acquisition profitable.
The moves would pare the size of operations on the continent and could be completed within a year, chairperson Sunil Bharti Mittal said in an interview with BloombergQuint at the World Economic Forum in Davos. Some of Bharti’s businesses in 15 African nations would be affected, he said.
Faced with an escalating price war in its home market, Bharti is looking for ways to pare its net-debt equivalent to about $12 billion (R163bn) as of September.
The company has sold its Sierra Leone and Burkina Faso operations, as well as some of its tower businesses, as it reorganises assets it bought in 2010 in a $9bn deal with Kuwait’s largest cellphone operator. Bharti’s African unit lost $91million in the quarter ended September, compared with a $170m loss the previous year.
As part of the debt reduction, Bharti is also considering selling a stake in Bharti Infratel, its tower unit. A committee was studying whether the sale would be a minority stake or control of the tower unit and a decision could be taken in a month, Mittal said. In October Bharti said, in a stock exchange filing, that it had formed a committee to evaluate options for its 73.5 percent stake in Bharti Infratel. Mittal’s moves come partly in response to the entry of India’s richest man Mukesh Ambani into India’s wireless telecommunications market last year.
Ambani stormed into what was already one of the most brutally competitive telecom markets with an offer of free voice services forever, and free data services for a limited time. This will probably force the exit of the smaller players. – Bloomberg
The Bharti Airtel office building in Gurgaon, on the outskirts of New Delhi. A price war in its home market is compelling it to trim debt in its Africa operations.