Bharti Airtel tower stake sale credit positive: Moody’s

KOLKATA: Moody’s Investor Service has said Bharti Airtel’s recent sale of a 3.7% stake for nearly Rs 2,600 crore in its tower unit, Bharti Infratel, is “credit positive” for the parent company, but expects the market leader’s profitability to be under pressure over the next year or more due to the ongoing brutal price war.

The global rating agency Thursday said the stake sale in the tower arm would have no “immediate impact on Bharti’s Baa3 issuer and senior unsecured debt ratings and negative outlook”.

“The sale of this stake by Bharti Airtel is consistent with the management’s commitment to strengthening its balance sheet and reducing debt, which we view positively,” Annalisa Di Chiara, vice president & senior credit officer at Moody's, said in a statement.

However, the Moody’s executive expected the stake sale to have “limited impact on Bharti Airtel’s leverage”, even assuming all proceeds are used for debt reduction.

Earlier this week, Bharti Airtel raised a shade over Rs 2,570 crore by selling roughly a 3.7% stake in its tower subsidiary, Bharti Infratel, to a clutch of global investors, a move that would help India’s top mobile carrier cut its debt and stay aggressive in a price war triggered by Reliance Jio.