- Bharti Airtel shareholders approved raising its stake in Airtel Africa by 16.31%
- The stake increase is via a Rs 28,220 crore cashless share-swap agreement
- Bharti Airtel's holding in Airtel Africa will rise from 62.73% to about 79%
Bharti Airtel on Monday said it has received approval from around 100% of its shareholders to raise its stake in Airtel Africa by 16.31% through a share-swap agreement worth Rs 28,220 crore. Following the transaction, Bharti Airtel's stake in Airtel Africa will rise to around 79% from the current 62.73%. "..nearly 100 per cent of its (Bharti Airtel) shareholders have approved the ongoing transaction to consolidate its stake in key strategic subsidiary Airtel Africa plc," the telecom major said in a statement.
The transaction involves Bharti Airtel issuing equity shares to Indian Continent Investment Limited, a promoter group entity, on a preferential basis, in exchange for its 16.31% stake in Airtel Africa. Almost 100% of shareholders voted in favour of the transaction, which will see Bharti Airtel issue equity shares to Indian Continent Investment Ltd. (ICIL), a promoter group entity, on a preferential basis in exchange for ICIL's 16.31% stake in Airtel Africa, according to Bharti Airtel's statement.
ALSO READ:
The transaction, being a cashless share-swap, presents an opportunity to the company to acquire a large block and increase its economic interest in a high-growth asset without any incremental leverage or cash outflow, the statement said. Since the proposed deal is structured as a cashless share swap, it will allow Bharti Airtel to acquire a sizeable stake in Airtel Africa without taking on additional debt or making any cash payment. The company said the transaction would increase its economic interest in a business that it considers a key growth platform while also simplifying the group's shareholding structure.
"Airtel Africa is central to our growth strategy and is well positioned to deliver robust performance with an increasing contribution to our consolidated revenues. Structured as a share-swap, India's largest ever transaction preserves capital strength for Airtel's core operations and future growth ambitions," Bharti Enterprises Founder and Chairman Sunil Bharti Mittal said. He said overwhelming support of shareholders reinforces the confidence that the investors have in the organisation. "As we look ahead, we see significant potential in Africa for long-term shareholder value creation," Mittal added.
The transaction remains subject to the receipt of all required regulatory approvals before it can be completed. Once the deal is consummated, Bharti Airtel's effective holding in Airtel Africa is expected to rise to about 79%. The company described the move as part of its long-term and calibrated strategy to steadily increase ownership in Airtel Africa, which it views as a strategic growth engine for the group. Airtel Africa operates across multiple African markets.
ALSO READ:
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.