Bharti Airtel promoter Bharti Telecom will buy a 3.3% Airtel stake from Singtel (Singapore Telecommunications) for about £12.89 million in 90 days, according to a statement by the telecom company. Bharti Group chairman Sunil Bharti Mittal’s family and Singtel have been co-investors in India's telecom company Bharti Telecom.
Singtel said that after the transaction, the group is expected to own an effective stake of 29.7% in Airtel, which is estimated to be worth about £12.6 billion. “After this interse transaction, Bharti Telecom will remain the principal vehicle to hold controlling shares in Airtel. Bharti Enterprises and Singtel to work towards equalising their effective stake in Airtel over time,” Mittal said. Singtel, southeast Asia’s largest telecom firm, at present holds 50.6% stake in Bharti Telecom and Mittal family holds 49.4%. Bharti Telecom at present holds 35.9% stake in India's second largest telecom service provider Bharti Airtel.
“Bharti and Singtel have agreed to work towards equalising their stake in Airtel over a period of time,” the filing said. Singtel also has plans of partial disinvestment of Airtel Africa. The transaction is expected to crystalise an estimated net gain of about £343.9 million, on divestment for Singtel.
Singtel CFO Arthur Lang said that as long-term strategic investors and partners, the value of Singtel’s stake in regional associates has risen substantially over the years but has not been properly reflected in the company’s share price.
“The sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizable value of our shareholding in Airtel. It is also part of our capital management approach to take monetisation opportunities that allow us to increase our return on invested capital and enhance total shareholders returns,” Lang said.
