Bharti Airtel has said that it will acquire a Warburg Pincus affiliate’s 20% equity stake in its DTH arm Bharti Telemedia for around INR 3,126 Crore which will be paid primarily via issuance of around 36.47 million equity shares of Airtel at a price of INR 600 per share; and up to INR 10,378 million in cash.
The issuance of shares proposed through preferential allotment is subject to shareholders’ approval, the company said on Wednesday.
In another statement, Airtel said its Board of Directors, has constituted a ‘Special Committee of Directors’ to consider and evaluate in detail, various options (or combination thereof) for re-organisation of businesses and shareholding structure of the Company and its various subsidiaries to achieve required flexibility and sharper focus on digital and non-telecom businesses of the Company to enable any unlocking of enhanced value for its stakeholders.
“The Special Committee shall place its suitable recommendations to the Board for consideration and/ or approval,” the company said.
The proposed transaction with Warburg is part of Airtel’s strategy to align the shareholding of its customer facing products, services and businesses under the same holding group. A full control and ownership over Bharti Telemedia allows Airtel to offer differentiated and converged solutions to customers so as to promote “One Home” strategy.
“DTH is an integral part of our Homes strategy and this transaction is another step towards simplifying the shareholding of our customer facing businesses providing structural flexibility and ease of implementation. Airtel has always enjoyed a close and strategic partnership with Warburg Pincus, across its business verticals and geographies and we are delighted to have them back as part of Airtel’s exciting journey ahead, including in digital businesses,” Harjeet Kohli, Group Director, Bharti Enterprises, said in the statement.Airtel will issue its shares to the Warburg Pincus affiliate at a premium of around 0.50% to the floor price determined as per regulations. The remaining consideration of around INR 937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding INR 1,000 million.
In December 2017, a Warburg Pincus affiliate, agreed to acquire 20% equity stake in Bharti Telemedia Limited, the DTH arm of Airtel for $350 million or over Rs2250 crore.
“Airtel was one of the earliest and most profitable investments for Warburg Pincus in India. We are delighted to be back as partners in Bharti Airtel through this transaction. We look forward to capitalising on the broad-based growth that the company is witnessing across its entire portfolio of businesses, including the digital build-outs,” said Vishal Mahadevia, Managing Director and Head of Warburg Pincus India said.
Citigroup Global Markets India Private Limited acted as the financial advisor to Airtel and Credit Suisse Securities (India) Private Limited acted as advisors to Warburg Pincus in connection with this transaction.