Airtel plans to raise $400 mn from Bharti Infratel stake sale via block deals
, ET Bureau|
Nov 13, 2017, 11.58 PM IST
NEW DELHI/MUMBAI: Bharti Airtel plans to raise $400 million (Rs 2,617.2 crore) by selling 3.5% in listed tower unit Bharti Infratel through block deals in the open market on Tuesday, said people familiar with the move, which seeks to pare debt, free up cash for expansion projects, and help offset the pressure on revenue.
According to a term sheet seen by ET, India’s top telco is planning to sell 65.43 million shares, or 3.5% in Bharti Infratel, in the price band of Rs 400 to Rs 415.5 a share, or at a maximum 3.7% discount to the stock’s last closing price on the National Stock Exchange (NSE).
On Monday, Bharti Infratel declined 3.4% to Rs 411.10 on the BSE and 2.6% to Rs 415.50 on the NSE. At the closing stock price on the BSE, Infratel had a market cap of more than Rs 76,000 crore. Shares in Bharti Airtel closed 0.8% lower at Rs 498.05 on the BSE.
Airtel will sell the stake via its unit, Nettle Infrastructure Investments Ltd., which held around 7.7% of Bharti Infratel as of September end, while Bharti Airtel owned 50.3% of the tower operator. KKR and CPP Investment Board hold another 10.3%, while the remaining Infratel stake is owned by public shareholders.
Bharti Airtel declined to comment. UBS, Goldman Sachs and J.P. Morgan were running the share sale for India’s leading telco.
Bharti has been monetising its stake in 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 and a stronger Vodafone India-Idea Cellular merged entity. The telco’s debt stood at Rs 91,480 crore at September end.
Airtel has recently scaled up its capital expenditure plans to Rs 25,000 crore for this fiscal year from Rs 20,000 crore initially planned.
The latest stake sale comes after Airtel offloaded 3.7% in Infratel, also through Nettle, in August, raising Rs 2,570 crore at Rs 380 a share. Bharti Airtel in March had transferred 21.63% stake in Bharti Infratel to Nettle. Of that, Bharti Airtel sold 10.3% to a consortium of KKR and Canada Pension Plan Investment Board for Rs 6,193.9 crore, 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.
On November 1, India’s top carrier made it clear that it was open to giving up majority control of Infratel, saying that a clutch of global investors have approached it, showing interest in buying a “significant stake” in Bharti Infratel, and that it will consider the proposals.
Airtel had said that if it accepts the proposals, it “could result in such investors acquiring control of Bharti Infratel”. Furthermore, the Airtel board would continue to evaluate the possibility of selling shares in Bharti Infratel in one or more tranches, the company had said.
According to a term sheet seen by ET, India’s top telco is planning to sell 65.43 million shares, or 3.5% in Bharti Infratel, in the price band of Rs 400 to Rs 415.5 a share, or at a maximum 3.7% discount to the stock’s last closing price on the National Stock Exchange (NSE).
On Monday, Bharti Infratel declined 3.4% to Rs 411.10 on the BSE and 2.6% to Rs 415.50 on the NSE. At the closing stock price on the BSE, Infratel had a market cap of more than Rs 76,000 crore. Shares in Bharti Airtel closed 0.8% lower at Rs 498.05 on the BSE.
Airtel will sell the stake via its unit, Nettle Infrastructure Investments Ltd., which held around 7.7% of Bharti Infratel as of September end, while Bharti Airtel owned 50.3% of the tower operator. KKR and CPP Investment Board hold another 10.3%, while the remaining Infratel stake is owned by public shareholders.
Bharti Airtel declined to comment. UBS, Goldman Sachs and J.P. Morgan were running the share sale for India’s leading telco.
Bharti has been monetising its stake in 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 and a stronger Vodafone India-Idea Cellular merged entity. The telco’s debt stood at Rs 91,480 crore at September end.
Airtel has recently scaled up its capital expenditure plans to Rs 25,000 crore for this fiscal year from Rs 20,000 crore initially planned.
The latest stake sale comes after Airtel offloaded 3.7% in Infratel, also through Nettle, in August, raising Rs 2,570 crore at Rs 380 a share. Bharti Airtel in March had transferred 21.63% stake in Bharti Infratel to Nettle. Of that, Bharti Airtel sold 10.3% to a consortium of KKR and Canada Pension Plan Investment Board for Rs 6,193.9 crore, 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.
On November 1, India’s top carrier made it clear that it was open to giving up majority control of Infratel, saying that a clutch of global investors have approached it, showing interest in buying a “significant stake” in Bharti Infratel, and that it will consider the proposals.
Airtel had said that if it accepts the proposals, it “could result in such investors acquiring control of Bharti Infratel”. Furthermore, the Airtel board would continue to evaluate the possibility of selling shares in Bharti Infratel in one or more tranches, the company had said.
