Bharti Telecom To Buy 3.33 Per Cent Stake In Airtel From Singtel For Rs 12,895 Crore

Singtel said that after the transaction, Singtel Group is expected to own an effective stake of 29.7 per cent in Bharti Airtel, which is estimated to be worth about Rs 1.26 lakh crore

Singtel holds 50.56 per cent stake in Bharti Telecom, while the Mittal family owns 49.44 per cent.

Bharti Airtel’s promoter Bharti Telecom will acquire a 3.33 per cent stake in Airtel from Singtel for about Rs 12,895 crore (2.25 billion Singapore dollars) in 90 days' time, the telecom operator said on Thursday. Bharti Group Chairman Sunil Bharti Mittal's family and Singtel are co-investors in Bharti Telecom (BTL).

In a statement, Singtel said that after the transaction, Singtel Group is expected to own an effective stake of 29.7 per cent in Bharti Airtel, which is estimated to be worth about Rs 1.26 lakh crore (SGD 22 billion). 

"After this inter-se transaction, Bharti Telecom will remain the principal vehicle to hold controlling shares in Airtel. Bharti Enterprises and Singtel to work towards equalising their effective stake in Airtel over time," Mittal said.

The share purchase is expected to be completed over a period of 90 days.

At present, Singtel holds 50.56 per cent stake in Bharti Telecom, while the Mittal family owns 49.44 per cent. Bharti Telecom at present holds 35.85 per cent stake in country's second-largest telecom service provider Airtel.

"Singtel and its affiliates have entered into an agreement to transfer approximately 3.33 per cent shares to BTL for an aggregate amount of approximately 2.25 billion Singapore dollars (SGD), leaving direct shareholding of Singtel and Bharti in Airtel at around 10 per cent and 6 per cent respectively," Bharti Airtel said in a regulatory filing on Thursday.

"Bharti and Singtel have agreed to work towards equalising their stake in Airtel over a period of time," the filing said.

Singtel also has plans of partial disinvestment of Airtel Africa. The transaction is expected to crystalise an estimated net gain of SGD 0.6 billion, about Rs 3,439 crore, on divestment for Singtel.

Arthur Lang, Singtel’s chief financial officer, said that as long-term strategic investors and partners, the value of Singtel's stake in regional associates has risen substantially over the years but has not been properly reflected in the company's share price.

"The sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizable value of our shareholding in Airtel. It is also part of our capital management approach to take monetisation opportunities that allow us to increase our return on invested capital and enhance total shareholders returns," Lang said.

Singtel said that the transaction will follow a number of capital management initiatives to rebalance and optimise Singtel's associates portfolio including an increase in Intouch Holdings, the parent company of Singtel's regional associate AIS and a partial divestment of Airtel Africa.

Singtel plans to invest SGD 2.25 billion raised from this transaction into 5G services and growth initiatives in the next few years, Lang added.

Airtel's total customer base grew by 4.7 per cent on a year-on-year basis to 49.69 crore, with India accounting for 36.24 crore subscribers.

Shares of Airtel were trading at Rs 742.10 on the BSE on Thursday, up 0.43 per cent over its previous closing.