Bharti Airtel to transfer 32% Infratel stake to Airtel's unit
In an exchange filing, India's Bharti Infratel Ltd said that its majority shareholder Bharti Airtel Ltd will lower its direct stake in the telecom tower company by more than a half.
In Short
- Airtel will own 18.3% stake in Infratel after the transfer, down from its current stake of 50.33%
- Bharti Infratel shares fell as much as 3.4% to 309 rupees
- Airtel had faced immense competition since upstart Jio with its soaring debts and eroding profit margins
India's Bharti Infratel Ltd said on Tuesday (March 12) that mobile carrier and its majority shareholder Bharti Airtel Ltd will lower its direct stake in the telecom tower company by more than a half.
Airtel's unit Nettle Infrastructure Investments Ltd will buy up to 32 per cent stake in Bharti Infratel by March 18, Infratel said in an exchange filing.
Airtel will own 18.3 per cent stake in Infratel after the transfer, down from its current stake of 50.33 per cent.
"Whenever Airtel transfers stake to Nettle Infrastructure, (eventually) they will sell the stake to a third party. This will help them raise money," said a Mumbai-based analyst.
Airtel, like its peers in the industry, has faced immense competition since the entry of Reliance Industries' upstart Jio in late 2016 with its debts soaring and profit margins eroding.
Singapore Telecommunications Ltd said last week, "It will buy roughly $525 million worth Airtel stock as a part of Airtel's plan to raise $4.6 billion through shares and bonds."
Nettle will buy Infratel shares for up to 362.45 rupees each, a premium of up to 13.4 per cent to the stock's closing price on Monday.
Nettle already owns 3.18 per cent stake in Infratel.
Bharti Infratel shares fell as much as 3.4 per cent to 309 rupees.
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