To help the telecom service provider partly pare its $14-billion debt, Bharti Airtel’s board has approved the sale of 20 per cent stake in its direct-to-home arm Bharti Telemedia to an affiliate of private equity (PE) firm Warburg Pincus for about $350 million. Of the 20 per cent stake to be acquired by the PE firm, Bharti Airtel will offload 15 per cent of its stake, while the remaining would be sold by another Bharti group entity.
“Bharti Airtel…and Warburg Pincus, a global private equity firm focused on growth investing, today (Tuesday) announced that an affiliate of Warburg Pincus will acquire up to a 20 per cent equity stake in Bharti Telemedia Limited, the DTH arm of Airtel, for approximately $350 million,” the companies said in a joint statement on Tuesday. This is the first stake sale in the telemedia arm by Bharti Airtel, and consequently, upon closing of the transaction, Airtel will own 80 per cent equity stake in Bharti Telemedia Ltd.
Bharti Telemedia had approximately 14 million subscribers and approximately $550 million in revenues during the 12-month period ended September 30. During the September-quarter, Airtel’s Digital TV business recorded average revenue per user of Rs 233 per month, slightly higher from Rs 232 per month when compared with the corresponding period last year.
“The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalise on incremental growth in digitisation and new TV penetration in Tier 3 and 4 towns and rural areas,” Warburg Pincus India managing director and co-head Vishal Mahadevia said. The Airtel board has approved the transaction, which is subject to regulatory approvals, the statement said. As part of the transaction, Viraj Sawhney, managing director, Warburg Pincus India, will join the board of Bharti Telemedia, it added.