Singtel to sell  3.3% in Airtel for ₹12,900 cr

Upon completion of the transaction, the Mittal family owned Bharti Enterprises will increase its effective stake in Bharti Airtel to 25.56% from 23.88%, while its direct stake will remain at about 6%.

Singtel, which first invested in Bharti Airtel in 2000, will reduce its stake in Bharti Airtel from 31.4% to 29.7% by cutting stake held by its subsidiaries as part of the transaction. Currently, Singtel holds 13.9% directly through subsidiaries Pastel Ltd and Viridian Ltd and 17.5% indirectly through a 49.4% stake in Bharti Telecom.

Bharti Telecom, in turn, owns 35.4% of Airtel. Bharti Enterprises owns 50.56% of Bharti Telecom. “As long-term strategic investors and partners, the value of our stakes in our regional associates has risen substantially over the years but has not been properly reflected in our share price. This sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizeable value of our holdings in Airtel,” said Arthur Lang, Singtel’s Group chief financial officer.

Singtel’s post-transaction holding is estimated to be worth Singapore $22 billion, the telecom company said.

“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,” said Sunil Mittal, chairman of Bharti Enterprises.

Bharti Telecom will calibrate and spread such acquisitions to maintain a comfortable level of leverage, Airtel said in a statement to BSE. Bharti Airtel’s shares fell 0.12% to ₹738.05 on Thursday.

Bharti Enterprises did not disclose the medium through which it will raise the required amount.

The Sunil Mittal-led telecom services provider recently onboarded Google with a $1 billion investment for a 1.28% equity stake, of which $300 million will be used over the next five years for multiple commercial agreements.

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