Singapore-based telecom operator Singtel will invest Rs 2,649 crore in Bharti Telecom, raising its stake in the holding company of Bharti Airtel by 1.7 per cent to 48.9 per cent.
The preferential allotment of shares which is expected to be closed by March 2018 would allow SingTel to raise its 'economic interest' in India's largest telecom operator Bharti Airtel by 0.9 per cent to 39.5 per cent.
In the statement, Bharti Airtel said that the funds will be used towards debt reduction.
As on December 31, 2017, the company's consolidated net debt stood at Rs 91,714 crore higher than Rs 91,480 crore in the previous quarter.
“Singtel International Investments will be allotted up to 85,450,000 new equity shares in Bharti Telecom at an issue price of Rs 310 per equity share. This will increase Singtel's stake in Bharti Telecom by up to 1.7 per cent for an aggregate consideration of approximately Rs 26.5 billion,” Singtel said in a separate statement.
Bharti Telecom held 50.1 per cent stake in Bharti Airtel at the end of 2017.
Billionaire Sunil Bharti Mittal-led Bharti Enterprise will continue to hold over 50 per cent stake in Bharti Telecom. Post the transaction, promoters holding in Bharti Airtel will be 27.08 per cent.
“Airtel shares a nearly two-decade-long relationship with Singtel, which has only become stronger over the years. The fresh round of investment highlights the confidence of Singtel in Airtel, and the increased attractiveness of the Indian telecoms sector following the recent consolidation,” said Deven Khanna, Managing Director, Bharti Telecom.
The investment comes within a span of two years of Singtel's participation in Bharti Telecom's Right Issue of Rs 2,500 crore, which was completed in February 2016.