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Airtel plans to raise Rs 26.17 billion by selling stake in Bharti Infratel through block deals

Tuesday, 14 November 2017

Bharti Airtel plans to raise Rs 26.17 billion by selling 3.5 per cent in listed tower unit Bharti Infratel through block deals in the open market. The telecom operator through the proposed stake sale seeks to pare debt; free up cash for expansion projects and help offset the pressure on revenue. The telecom operator is planning to sell 65.43 million shares in Bharti Infratel, in the price band of Rs 400 to Rs 415.5 a share or at a maximum 3.7 per cent.

The latest stake sale comes after Airtel sold 3.7 per cent in Bharti Infratel, through Nettle, in August 2017, raising Rs 25.70 billion at Rs 380 a share. Meanwhile, Bharti Airtel in March 2017 had transferred 21.63 per cent stake in Bharti Infratel to Nettle. Of that, Bharti Airtel sold 10.3 per cent to a consortium of KKR and Canada Pension Plan Investment Board for Rs 61.93 billion or at Rs 325 a share. Since then, the shares of Infratel have surged, paving the way for Airtel to potentially rake in substantial funds and deleverage its balance sheet.

Airtel is expected to sell the stake via its unit, Nettle Infrastructure Investments Limited, which held around 7.7 per cent of Bharti Infratel as of end-September 2017, while Bharti Airtel owned 50.3 per cent of the tower operator. KKR and CPP Investment Board hold another 10.3 per cent, while the remaining Infratel stake is owned by public shareholders. Further, UBS, Goldman Sachs and J.P. Morgan have been running the share sale for Bharti Airtel.

Bharti Airtel has been monetising its stake in Bharti Infratel gradually to pare debt and improve cash flows to fund the much-needed investments it must make to expand the 4G-led data network and stave off competition from Reliance Jio Infocomm Limited (RJIL) and a stronger Vodafone India-Idea Cellular merged entity. The operator’s debt stood at Rs 914.80 billion as of September 2017. Further, Airtel has recently scaled up its capital expenditure plans to Rs 250 billion for 2017-18 from Rs 200 billion initially planned.

 

 
 

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