Singtel to raise Bharti Airtel stake to 39.5% via investment in Bharti Telecom

Singapore

SINGTEL will subscribe to new shares in Bharti Telecom - the holding company of Indian telecommunications company Bharti Airtel - under a proposed preferential allotment that will see it increase its stake in Bharti Telecom.

Singtel will be allotted up to 85.45 million new equity shares in Bharti Telecom at 310 rupees apiece, which will raise Singtel's stake in Bharti Telecom by up to 1.7 per cent for a total consideration of around 26.5 billion rupees (S$555.6 million).

The allotment, expected to close by March 2018, will see Singtel's economic interest in Bharti Airtel increase by 0.9 percentage point to 39.5 per cent.

Singtel's total stake in Bharti Telecom will increase to 48.90 per cent with this current investment, according to a press statement by Bharti Airtel.

It further added that the funds raised will go towards debt reduction.

Bharti Telecom holds around 50.1 per cent of Bharti Airtel, which has been a Singtel associate company since 2000.

Arthur Lang, Singtel's chief executive officer, international, said that the move was an opportunity to deepen strategic ties with Bharti Airtel despite headwinds in India.

"We take a long-term view of our investment in Airtel, which continues to be a strong market leader in a region with rapidly increasing smartphone penetration and mobile data adoption," he said.

Singtel shares closed on Monday at S$3.48, down one Singapore cent or 0.29 per cent.