Shares of Bharti Airtel Ltd. rose after the telecom services provider said its promoters Bharti Telecom Ltd. and Singtel Ltd. will "equalise" their stake in the company.
The statement from Airtel comes after Singapore Telecommunications Ltd., known as Singtel, said it would sell 3.3% of its shares to Bharti Telecom for 2.25 billion Singaporean dollars ($1.6 billion), according to its statement on the Singapore Exchange.
The stake sale will be executed within 90 days and will trim Singtel's share holding in Airtel to 29.7% from 31.4%. Singtel said it estimates a net gain of S$600 million from the sale.
Singtel will use the sale proceeds to "reduce debts and/or fund the group's needs for 5G capital expenditures and growth initiatives".
In a statement, Bharti Airtel said Bharti Telecom and Singtel have agreed to work towards equalising their stake in the telecom provider over a period of time. "Bharti Telecom will calibrate and spread such acquisitions to maintain a comfortable level of leverage," it said in an exchange filing.
Also, it said its promoter Bharti Telecom will continue to be the principal vehicle to hold controlling shares in Airtel and will "further strengthen its shareholding".
Shares of the company gained as much as 2.07% in early trade Thursday. Of the 33 analysts tracking the company, 30 maintain a 'buy' and two suggest a 'hold', while one recommends a 'sell', according to Bloomberg data. The overall consensus price of analysts tracked by Bloomberg implies an upside of 16.8%.
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