Bharti Airtel sells 3.65% stake in tower arm for $403 mn

Bharti Airtel Ltd, India’s largest telecom operator by customers, on Tuesday sold a minority stake in its tower subsidiary Bharti Infratel Ltd to cut debt.

Bharti Airtel, through wholly owned arm Nettle Infrastructure Investment Ltd, sold 67.53 million shares via bulk deals, stock-exchange data shows. This translates into a 3.65% stake and would reduce promoter holding in Bharti Infratel to roughly 58%.

The bulk deals took place at an average price of Rs 380.43 per share. The sale would fetch Rs 2,569.21 crore ($403.33 million) gross of transaction costs, advisory fees, and statutory levies.

UBS and JP Morgan advised Bharti Airtel on the share sale, the company said in a statement.

Bharti Airtel didn’t name any buyers, saying only that it allotted the shares to “global tower company investors, fund managers and long-only funds, including many repeat investors”.

People privy with the development said Canada Pension Plan Investment Board (CPPIB), Brookfield Asset Management and private equity major Kohlberg Kravis Roberts & Co Ltd (KKR) are likely to be among the buyers.

Email queries sent to KKR, CPPIB and Brookfield did not immediately yield a response.

Shares of Bharti Infratel on the BSE dropped 4% to Rs 382.05 apiece. The 30-share benchmark Sensex fell 0.8%. Bharti Airtel closed flat at Rs 410 a share.

Earlier this year, Bharti Airtel had transferred an 11.32% stake in Bharti Infratel to Nettle Infrastructure.

In March, the company had sold a 10.3% stake in Bharti Infratel to a consortium of entities, including KKR and CPPIB, to raise Rs 6,193.9 crore.

The telecom operator’s consolidated net debt was Rs 87,840 crore at the end of June 2017 compared with Rs 91,400 crore three months before.

The company reported a consolidated net profit of Rs 367 crore for the three months ended in June, down roughly 75% from Rs 1,462 crore a year earlier. Consolidated revenue fell 14% to Rs 21,958 crore.

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