Bharti Telecom have today sold 2.75% stake in Bharti Airtel to institutional investors and raised Rs. 8,433 crore.
The allocation was done to over 50 accounts with Top 10 getting 2/3rd of the overall allocation. The total sale proceeds of over Rs. 8,433 crores i.e. $1.15 billion was oversubscribed multiple times with a healthy mix of all categories of investors, long only and hedge fund investors across geographies in India, Asia, Europe and the US.
The stake sale was anchored by several existing and new shareholders and several marquee global mutual fund complexes, sovereign wealth funds, multi-strategy funds and domestic institutional investors in sizable quantities.
Bharti Group and Singtel will continue to own a majority stake in Bharti Airtel at 56.23 %, even post the transaction.
Announcing the successful placement, Harjeet Kohli, Group Director, Bharti Enterprises said, “The strong and wide response received from a diverse mix of investors across geographies, even during challenging global macroeconomic conditions, clearly demonstrates the competitive strength and the long term prospects of Bharti Airtel. On the back of such a strong demand from international and domestic investors, the amount raised was increased to $1.15 Billion.”
“With the proceeds, Bharti Telecom will become a zero debt company providing an even stronger financial flexibility and capacity to provide any additional shareholder support as may be desired by Bharti Airtel from time to time,” added Kohli.
The sale proceeds will be utilized to fully repay debt at Bharti Telecom which was raised primarily to finance the acquisition of Bharti Airtel equity shares in the past. With Bharti Telecom becoming a zero debt company Bharti Airtel’s credit profile will also be augmented as it will stand to benefit from deleveraging on a consolidated basis including any debt of the promoter holding company.
In the last few years the Promoters have invested over Rs. 21,000 crores (over USD 3 Billion) in Bharti Airtel and stay fully committed to investing further in the business as may be required.