Bharti Airtel To Raise Airtel Africa Stake In Rs 28,000-Crore Stock Swap

Bharti Airtel has taken its first stride into acquiring more stake in its UK-listed subsidiary Airtel Africa after announcing share swap with promoter enitity Indian Continent Investment Ltd. via a regulatory filing on Wednesday. 

As part of the deal, Airtel will issue around 14.67 crore fully paid-up equity shares of the company on a preferential basis against swap of upto 16.31% shareholding or up to 59.52 shares held by Mittal-family owned ICIL, in Airtel Africa. 

"The Transaction includes issuance of equity shares of the Company on a preferential basis to ICIL (promoter group entity of the Company) against swap of upto 16.31% stake of Airtel Africa held by ICIL, in compliance with SEBI ICDR Regulations," the filing stated.

Issue price for the equity share is placed at Rs1,923 per share, "well above the floor price in terms of SEBI ICDR Regulations", airtel highlighted in the filing.

It added that it is based on the valuation report obtained by the company from independent registered valuer, certifying the swap ratio.

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The total value of the share swap amounts to around Rs 28,000 crore or close to $2.9 billion. At present, Bharti Airtel holds 62.73% stake in the arm through its wholly-owned subsidiary Airtel Africa Mauritius Ltd. Therefore, the acquisition will increase Airtel's stake in the UK arm to approximately 79%. 

After the deal, ICIL holding in Airtel will increase to 3.3% from 0.92% and, in turn, promoter holding in Airtel will increase to 50.07% from 48.87%. Hence, Mittal Family holding in Airtel will stand at 23.2% while SingTel holding in Airtel will stand at 26.8%. 

Moreover, the company outlined that it recognises the transaction as being in line with the objective of consolidating/ strengthening shareholding in a strategic subsidiary.

 Apart from being cash-less and leverage neutral, the Transaction is accretive to EPS of Airtel India with additional earnings outweighing the dilution, according to Airtel.

Further,  shares of Airtel India are proposed to be issued at a premium of  9.5% to the last closing price prior to the relevant date and the corresponding shares of Airtel Africa shall be acquired at 11.6% discount to the last closing price prior to relevant date.

Accordingly, the deal is beneficial for minority stakeholders as there will be no cash outflow on the basis of this agreement. 

Bharti Airtel Share Price

Bharti Airtel's stock ended 1.84% higher at Rs 1,789.20 apiece on the NSE. This compared to a 0.14% advance in the benchmark Nifty index on Wednesday. 

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