India’s Bharti Infratel Ltd on Tuesday March 12 said 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.
In an exchange filing, Infratel said that Airtel’s unit Nettle Infrastructure Investments Ltd would buy an up to 32 percent stake in Bharti Infratel by March 18.
Airtel will own an 18.3 percent stake in Infratel after the transfer, down from its current stake of 50.33 percent.
A Mumbai-based analyst said that whenever Airtel transfers stake to Nettle Infrastructure, (eventually) they would sell the stake to a third party. This could help them raise money as well.
Airtel, like its competitor’s 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 that it has agreed to buy roughly $525 million worth Airtel stock as 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 percent to the stock’s closing price on Monday. Nettle already owns a 3.18 percent stake in Infratel. Bharti Infratel shares dropped 3.4 percent to 309 rupees.
In addition, merger of loss-making telecom firm Tata Teleservices (TTSL) with Bharti Airtel, which got the NCLT’s green signal in January, needs to keep a few things in check before it can get cleared Department of Telecom (DoT). Tata Teleservices has a bill for unpaid dues amounting to Rs 15,000 crore.
A DoT official told Economic Times that Airtel and TTSL have to pay around Rs 10,000 crore and Rs 2,800 crore, respectively, as SUC [spectrum usage charge]. There is also another Rs 2,000 crore of OTSC [one-time spectrum charge] that transferee firm Airtel will have to pay in the form of bank guarantees to the government.
