Bharti Will Acquire A 3.33% Stake In Airtel

The promoter company of Bharti Airtel, Bharti Telecom, announced on Thursday that it would pay Singapore's Singtel Rs 12,895 crore ($1.61 billion) for a 3.33% share in the firm. After the sale, which will take place over a 90-day period, Singtel's actual share in Bharti Airtel will decrease from its current 31.4% to 29.7%. Its decreased position in Bharti Airtel will consist of a 10.5% direct share and a 19.2% indirect stake through BTL. The Mittal family's ownership of Bharti Airtel will increase from 22.34% to 25.64%.

Since 2000, Singtel has owned stock in Bharti Airtel. “Bharti and Singtel have agreed to work towards equalizing their stake in Airtel over a period of time. BTL will calibrate and spread such acquisitions to maintain a comfortable level of leverage,”  according to Bharti Airtel.

Bharti Enterprises chairman Sunil Mittal said in a statement that “After this inter-se transaction, Bharti Telecom will remain the principal vehicle to hold controlling shares in Airtel. Bharti Enterprises and Singtel have agreed to work towards equalizing their effective stake in Airtel over time,” 

Analysts claim that the Mittal family will not benefit strategically from purchasing the 3.33% stake from Singtel, thus it's feasible that they would consider finding a digital partner in the future.

According to Singtel, the stake sale will help the Singtel Group's capital recycling strategy by releasing about $2.25 billion (Singapore dollars). It further stated that the transaction is expected to result in a net gain on divestiture for the Singapore telecom company of approximately S$0.6 billion.