Bharti Airtel explores IPO of Africa unit
Photo Credit: Shah Junaid/VCCircle

Billionaire Sunil Bharti Mittal-led Bharti Airtel Ltd, India’s largest telecom operator, is exploring options to list its Africa unit on an international stock exchange.

Airtel Africa, operated by Amsterdam-based Bharti Airtel International (Netherlands) BV, has initiated non-binding exploratory discussions with banks and intermediaries to evaluate a public offer and listing, the Indian company informed stock exchanges on Wednesday.

“The above discussions are at an exploratory stage and at this juncture, there is no certainty of any final decision or outcome,” Bharti Airtel said.

Airtel Africa provides telecom services in 15 countries with Nigeria being its most profitable market.

Bharti Airtel didn't specify any reasons for listing the Africa unit. But the mobile-phone operator could be looking to generate capital to expand its international businesses and cut the debt burden of its India operations.

Bharti Airtel had consolidated net debt of Rs 91,714 crore at the end of 2017.

In November, Bharti Airtel sold a 4.49% stake in its telecom tower infrastructure arm, Bharti Infratel Ltd, for Rs 3,325 crore ($510 million) to trim its debt.

Bharti Airtel has previously, too, sold a stake in its tower arm to help reduce its debt. In March 2017, private equity firms Kohlberg Kravis & Roberts (KKR) and Canada Pension Plan Investment Board (CPPIB) had together bought a 10.3% stake in Bharti Infratel for Rs 6,193 crore.

The telecom operator, like its peers, has been struggling amid a price war triggered by the entry in late 2016 of billionaire Mukesh Ambani's Reliance Jio Infocomm Ltd.

Bharti Airtel reported a 11% fall in consolidated profit for the three months through December 2017 — its eighth straight quarterly drop. Net profit stood at Rs 306 crore, which is the smallest profit since the October-December 2012 quarter, Bloomberg data showed.

Indian telecom operators are heavily indebted due to costly airwaves, low tariffs and intense competition. Many companies have sold assets to survive while some smaller operators have merged with bigger rivals such as Bharti.

Anil Ambani-led Reliance Communications agreed to sell its wireless spectrum, telecom towers and real estate assets to Jio in December 2017. The move will help it reduce its debt by about Rs 25,000 crore.

In March 2017, Vodafone Group Plc’s India unit and Aditya Birla Group company Idea Cellular Ltd agreed to merge in a transaction that will create the country’s biggest telecom operator, valued at $23.2 billion.

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