Airtel sells stake in Infratel
KKR-backed consortium buys 10% stake for `6,139.9 cr
Bharti Airtel has sold 10 per cent stake in its mobile tower arm Bharti Infratel to a consortium of KKR and Canada Pension Plan Investment Board for `6,193.9 crore (around $951.6 million).
Bharti Airtel will primarily use the proceeds from this sale to reduce its debt. It sold around 190 million shares of its subsidiary Bharti Infratel at a price of `325 per share.
After the sale, Bharti Airtel’s equity holding in Bharti Infratel stands at 61.7 per cent, and that of KKR and CPPIB at 10.3 per cent.
This transaction makes it KKR’s second investment in Bharti Infratel. Previously, the funds managed by KKR had invested in Bharti Infratel during the period 2008 to 2015.
Post this transaction, the stake held by KKR and CPPIB (combined) will be the single largest public shareholder block.
“This investment by a consortium of marquee long-term investors underlines the confidence of the global investors in India’s growth story and the government’s Digital India initiative in particular. It further reinforces the positive outlook for the telecom infrastructure sector. The long-term investment horizon of the investors aligns well with the capital needs and business cycles of Bharti Infratel,” said Sunil Bharti Mittal, chairman, Bharti Airtel.
Bharti Infratel is one of leading provider of tower and related infrastructure and it deploys, owns and manages telecom towers and communication structures, for various mobile operators.
The firm’s consolidated portfolio of over 90,000 telecom towers, which includes over 38,500 of its own towers and the balance from its 42 per cent equity interest in Indus Towers, makes it one of the largest tower infrastructure providers in the country with presence in all 22 telecom circles.
The three leading wireless telecommunications service providers in India by revenue — Bharti Airtel, Vodafone and Idea Cellular — are the largest customers of Bharti Infratel.
The company has been the industry pioneer in adopting green energy initiatives for its operations.
Analysts expect an increase of acquisitions in India's mobile tower business, as wireless providers seek to exit the business in order to reduce high debt levels and focus on their core businesses.