Bharti Airtel’s UK subsidiary Airtel Africa on Wednesday announced that a group of six global investors led by Warburg Pincus, Temasek, Singtel and SoftBank Group International will invest $1.25 billion (around Rs 9,141 crore) through a primary equity issuance in the company, the proceeds from which will be used to retire part of its around $5-billion debt and for expanding operations. The deal pegs Airtel Africa’s post-money equity value at $4.4 billion and enterprise value at $8.15 billion. “Airtel Africa subsequently intends an Initial Public Offering (IPO) and use the proceeds primarily for further reduction of debt,” the company said, adding that in most of the markets, Airtel Africa ranks amongst the top two operators and is well placed to capture a significant market share of the rapidly growing data demand across countries. “The transaction will help us further deleverage our balance sheet and boost our capacity to upgrade networks, expand coverage in different markets and achieve rapid growth of Airtel Money across our operations,” Bharti Airtel Africa managing director and CEO Raghunath Mandava said. Singtel in a separate statement said that it will invest $250 million in Airtel Africa. Brokerage Deutsche Bank in a report said, “Post the deal, the six investors would hold around 28.5 per cent stake in the African operations. Singtel has contributed 20 per cent of monies, which would imply a direct stake of 5.7 per cent”. ICICI Securities said that Bharti has an equity stake of 92-93 per cent in its African operations, which will effectively reduce to 64-65 per cent post the deal. On debt reduction, ICICI said, “Bharti Airtel had net debt (including finance lease obligation) of $15.8 billion, thus the proceeds will reduce net debt by 8 per cent. Further, Airtel has refinance obligation of Rs 26,000 crore in FY19 of which it has already refinanced euro 1 billion (Rs 8,400 crore) debt this month (October), and incremental debt reduction through Africa stake sale. This should reduce refinance obligation burden for Bharti Airtel”. —FE
