To clean up debt and bring it to the level of zero at the promoter level, Bharti Telecom — the promoter group of Bharti Airtel — will sell 2.75 per cent stake in the latter to raise about $1 billion via a secondary market block deal on Tuesday, sources said on Monday.
The block deal will be conducted by JP Morgan India at around Rs 558 per share, close to 6 per cent discount to the closing price of Rs 593.20 on May 22 on the NSE.
As of March, Bharti Telecom held about 38.79 per cent stake in Bharti Airtel, which will get reduced by 2.75 per cent after the deal. The total promoter shareholding as per exchange data currently stands at 58.98 per cent.
After the block deal, the stake held by the promoters of Bharti Airtel – Bharti Telecom, Indian Continent Investment, Viridian and Pastel – will fall to 56.23 per cent from 58.98 per cent, as per information available on the NSE.
Sources said the debt at the promoter level was taken to raise funds for the telco from time to time and also for buying into the rights issue of Bharti Airtel.
Once this debt is cleaned up, sources said debt overhang at Bharti Airtel may also get eased as many constituents, including rating agencies, take full debt – including that of the promoter company – into account. It will also create full capacity at Bharti Telecom for any further capital of shareholder support for Bharti Airtel, sources said. —FE
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