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Bharti Telecom to buy 3.33% Airtel stake from Singtel for Rs 12,895 cr; sale & transfer to happen in November

Bharti Airtel promoter Bharti Telecom will buy a 3.33 per cent stake from Singtel for 2.25 billion Singapore dollars (around Rs 12,895 crore) in 90 days

Bharti Telecom to buy 3.33% Airtel stake from Singtel for Rs 12,895 cr; sale & transfer to happen in November
The telecom major Bharti and Singtel have agreed to work towards equalising their stake in Airtel over a period of time

Bharti Airtel promoter Bharti Telecom will buy a 3.33 per cent stake from Singtel for 2.25 billion Singapore dollars (around Rs 12,895 crore) in 90 days. Bharti Group chairman Sunil Bharti Mittal’s family and Singtel own Bharti Telecom. The telecom major Bharti and Singtel have agreed to work towards equalising their stake in Airtel over a period of time. “Singtel and its affiliates have entered into an agreement to transfer approximately 3.33 per cent shares to BTL for an aggregate amount of approximately 2.25 billion Singapore dollars, leaving direct shareholding of Singtel and Bharti in Airtel at around 10 per cent and 6 per cent respectively,” Bharti Airtel said in a regulatory filing on Thursday.

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The sale and transfer of the sale will be executed any time before 23 November 2022. “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,” Arthur Lang, Group CFO, Singtel.

Singtel likely to own 29.7% stake in Bharti Telecom

Lang said that this would be a part of their capital management approach to take monetisation opportunities that allow Singtel to increase its return on invested capital and enhance total shareholder returns. Singtel in a release said that after this transaction, the Singtel Group is likely to own an effective stake of 29.7%, which is estimated to be worth S$22 billion. This comprises a 19.2% indirect stake through Bharti Telecom and a 10.5% direct stake.

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Singtel made its first investment in Airtel in 2000. “With a more sustainable market structure after industry reforms and exciting new growth opportunities emerging from the government’s Digital India vision, we expect Airtel to become a significant contributor to Singtel. We remain committed long-term investors having invested approximately S$1.3 billion in Airtel over the last three years. We look forward to unlocking Airtel’s significant long-term growth potential as Airtel further transforms India’s digital economy through 5G,” Lang said.

Bharti Telecom acquisition to be completed in 90 days

As per the Bharti Airtel’s BSE filing, the acquisition is to be completed over a period of 90 days. Bharti Telecom will calibrate and spread such acquisitions to maintain a comfortable level of leverage. It may be noted that Bharti Enterprises and Singtel have had over 20 years of partnership. Over these years, Bharti Airtel has not only acquired a pan-India leadership position, but has also expanded to 16 more countries in Africa and South Asia.

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