Bharti Airtel to consider proposal to sell controlling stake in Bharti Infratel

KOLKATA: A clutch of global investors have approached Bharti Airtel showing interest in buying a “significant stake” in its listed tower unit, Bharti Infratel, and it will consider the proposal, the nation’s top telecom operator said.

Airtel owns 58% of the tower company. Any such deal will help the telco pare its Rs 91,480 crore debt and build a war chest to compete aggressively with moneyed new entrant Reliance Jio Infocomm.

If the company accepts the proposal, it “could result in such investors acquiring control of Bharti Infratel,” Airtel said in an exchange filing after market hours on Tuesday. A committee of directors (CoD), constituted by the Bharti Airtel board a year ago to evaluate a stake sale in Bharti Infratel, has recommended that such proposals “be duly considered”, it said. Airtel said the company would make “a disclosure in accordance with the relevant regulations if and when the board approves a transaction”.

The Sunil Mittal-led telco, however, said it has “not entered into any agreements in relation to any such proposal or discussions, and there is no certainty of any transaction until such time the board reviews and approves a final proposal”. In parallel, the Airtel board will continue to evaluate possibilities of selling shares in Bharti Infratel in one or more tranches, the company said.

Shares of Bharti Infratel, India’s only listed telecom tower company, closed Tuesday at Rs 441.95, up 2.8% on the BSE, giving it a market capitalisation of Rs 81,743.44 crore.

After the constitution of CoD last year, Bharti Airtel has sold a 13.96% stake in Bharti Infratel to private equity investors and through a qualified institutional placement.

Bharti Airtel currently owns 58% of Bharti Infratel while a consortium of private equity firm KKR and CPP Investment Board holds another 10.3%, which it acquired through a $952 million investment made in March. In August, Airtel sold another 3.65% in Infratel for Rs 2,570 crore, or about Rs 380 a share. The remaining Infratel stake is held by public shareholders.

The Bharti Infratel board , in a meeting held on October 30, also decided to explore and evaluate acquisition of stake in one or more tranches in Indus Towers, with the aim of making it a subsidiary or even a wholly owned subsidiary, the company said in a stock exchange filing. ET, in its October 11edition, reported that Bharti Infratel could buy out all or most of the 58% shareholding of other partners — Vodafone India, Idea Cellular and Providence Equity Partners — in Indus Towers in what would likely to be the first stage of a two-part deal.

The second stage would likely see a consortium led by US buyout fund KKR and including CPPIB, Abu Dhabi Investment Authority and GIC Singapore acquiring an Indus-Bharti Infratel combined entity for $11billion, ET had reported.