Bharti, Vodafone plan to reduce stakes in mobile tower joint venture; Airtel to raise Rs 22,400 cr via share sale

Bharti Airtel and the Vodafone Group Plc may reduce their stakes in a mobile tower joint venture which is expected to be created through the merger of Bharti Infratel and Indus Towers soon, said media reports.

According to The Economic Times, Bharti Airtel and Vodafone are in discussion with a group led by private equity firm KKR to reduce their stakes to 13 percent each in the company that will be created by the imminent merger of Bharti Infratel and Indus Towers.

Bharti Airtel and Vodafone Group, which currently own 42 percent each in Indus Towers, will have reduced stakes at 37.2 percent and 29.4 percent respectively after the merger of Bharti Infratel and Indus Towers, said the report. Bharti Airtel is expected to raise about Rs 22,400 crore through stake sale, the report added.

In April 2018, Bharti Airtel, Idea Cellular and Vodafone Group had announced an agreement for the merger of Indus Towers and Bharti Infratel to create the largest mobile tower operator in the world outside China with over 163,000 towers across 22 telecom service areas, said a PTI report.

“The combined company, which will fully own the respective businesses of Bharti Infratel and Indus Towers, will change its name to Indus Towers Limited and will continue to be listed on Indian Stock Exchanges,” Bharti Group said while announcing the joint deal.

The combined company will own 100 percent of Indus Towers. Indus Towers is currently jointly owned by Bharti Infratel (42 percent holding), Vodafone (42 percent), Idea Group (11.15 percent) and Providence (4.85 percent).

Vodafone Idea is expected to raise about Rs 5,500 crore through sale of its 11.15 percent stake in Indus Tower which is to be completed in the next three-four months,a PTI report said quoting a senior company official.

Under a contract signed with Bharti Infratel in April 2018, the company has an option to sell the 11.15 percent stake in Indus Tower for cash ahead of the merger of the country’s largest mobile tower firm with the Bharti group firm.

“As things stand now, that process is in National Company Law Tribunal (NCLT) and expectation is that it should be completed in the next 3-4 months time frame. Before the merger is consummated, we have the right to receive that in cash. The value will fluctuate. The value is dependent on Bharti Infratel (stock) price,” Vodafone Idea chief financial officer Akshaya Moondra told PTI.

In July last year, Infratel, the mobile tower arm of Bharti Airtel, had received clearance from stock exchanges for its merger with Indus Towers.

--With PTI inputs