New Delhi– Singapore Telecommunications (Singtel) on Thursday said it is acquiring 7.39 per cent additional stake in the holding arm of India’s largest telecom company Bharti Airtel for around $650 million.
The development, as per a series of regulatory filings across countries, is a part of a larger deal struck by Singtel with Temasek to acquire 21 per cent in Thailand-based Intouch Holdings and 7.39 per cent of Bharti Telecom for a total consideration of $1.8 billion.
“The aggregate consideration payable for the Bharti Telecom sale shares is approximately Singapore Dollars 884 million (US $658 million),” Singtel added about the deal, which comes just ahead of India’s largest-ever spectrum auction to date.
“Singtel currently already has an interest of approximately 39.78 per cent in the share capital of Bharti Telecom and an interest of approximately 15.01 per cent in the share capital of Bharti Airtel.”
Following the acquisition of the Bharti Telecom sale shares, Singtel’s interest in the share capital of Bharti Telecom will increase from approximately 39.78 per cent to 47.17 per cent.
“Singtel will pay Temasek Thai Baht 60.83 for each share of Intouch and Rs 235.62 for each share of Bharti Telecom. The transaction is subject to the fulfilment of certain conditions precedent, including shareholder and relevant regulatory approvals, and is expected to be completed by December 2016,” the statement added.
It will be satisfied in full in cash in Singapore Dollars on completion, and will be funded in part through the utilisation of the cash proceeds from the allotment and issue of the new shares under the placement agreement, with the balance being funded by internal cash and short-term debt.
The rather complex deal also involves a share placement of 386 million new Singtel shares to Temasek totalling Singapore Dollars 1.605 billion at a price of Singapore Dollars 4.16 per new share.
Singtel said Bharti Airtel is India’s largest telecommunications company with operations in 18 countries across South Asia and Africa and that it has been an associate of its group since 2000. It said the acquisition of stake in Bharti Telecom and Intouch Holdings, which is the biggest shareholder in Thailand’s largest mobile phone company, Advanced Info Services, further consolidates its economic interests in the region.
“Singtel has been a strategic partner to both Advanced Info Services and Airtel for more than 15 years. We have built deep and trusted relationships, worked well together through the years, sharing knowledge and expertise and we have grown together, from strength to strength,” said Singtel Group Chief Executive Chua Sock Koong.
“Today, they have a combined mobile customer base of more than 380 million across Asia and Africa. This is a unique opportunity for us to deepen our relationships with two great market leaders,” Chua added.
The company said both India and Thailand are fundamentally attractive markets, reaping the benefits of rapidly increasing smartphone penetration and mobile data adoption by a growing middle class.
“Both Advanced Info Services and Airtel are well-positioned to benefit from these trends. The recent mobile spectrum auctions in Thailand and ongoing industry consolidation in India have strengthened their competitive positions. They have also built for the future, securing significant spectrum for the long term and investing extensively in 3G and 4G networks and services.”
Bharti Airtel declined comment on the deal, and only posted the identical press statement of Singtel in the regulatory filing to Indian stock exchanges. The shares of Bharti Airtel closed at Rs 352.40 on the BSE on Thursday, up Rs 7.15 or 2.07 per cent.
Besides mobile telephony, the New Delhi-based Bharti group has interests in diverse industries, telecom towers infrastructure including mobile gaming, retail, insurance, branded farm produce, realty and e-learning. (IANS)
