Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar, has agreed to invest $200 million (Rs 1,423 crore) in Airtel Africa Ltd, a subsidiary of telecommunications company Bharti Airtel Ltd.
QIA will make the investment through a primary equity issuance and no existing shareholder will sell its shares, billionaire Sunil Mittal-led Bharti Airtel said in a statement on Wednesday.
The capital infusion from QIA is in addition to the $1.25 billion investment by six global investors including Warburg Pincus, Temasek, Singtel and SoftBank Group International in October last year.
Airtel Africa, which operates in 14 countries across the continent, will use the proceeds to reduce its net debt. The Indian company didn’t specify the amount of debt Airtel Africa has on its books. However, in October, it had said that the unit had debt of about $5 billion.
For Bharti Airtel, this is its second engagement with Qatar. The Indian company had, in June 2013, raised Rs 6,796 crore ($1.18 billion then) for a 5% stake from Qatar Foundation Endowment (QFE), the investment arm of Qatar’s royal family that operates separately from QIA. This funding had helped Bharti Airtel cut its debt, and expand operations in South Asia as well as in Africa.
QFE exited Bharti Airtel in November 2017, selling its entire 5% stake for Rs 9,620 crore ($1.48 billion) in one of the single-largest exits for a PE-style investment in the country in recent times.
Airtel had entered Africa in 2010 after acquiring Zain Telecom's business in the continent for about $10.7 billion in the second-biggest overseas acquisition by an Indian company.
However, the unit has struggled to be profitable. The company attempted to sell operations in four African countries to France's Orange in 2015 but the deal never fructified. It was able to achieve a full year of positive net earnings for its African business only in the financial year 2017-18, Bharti Airtel said in its annual report.