India’s largest mobile operator, Bharti Airtel, has agreed to sell a 5% stake in itself to Qatar Foundation Endowment (QFE) in a transaction valued at US$1.26bn.
The carrier said it will issue approximately 2 million shares to QFE for Rs340 (US$6.30)…
India’s largest mobile operator, Bharti Airtel, has agreed to sell a 5% stake in itself to Qatar Foundation Endowment (QFE) in a transaction valued at US$1.26bn.
The carrier said it will issue approximately 2 million shares to QFE for Rs340 (US$6.30) a piece, or Rs67.96bn (US$1.26bn) in total.
QFE, which is the investment arm of non-profit organisation Qatar Foundation for Education, Science and Community Development, was advised by Goldman Sachs on this transaction.
The investment “will further strengthen the capital structure and provide further flexibility for the company to deliver on its growth strategy,” Bharti Airtel said in a statement.
Yesterday (2 May), Bharti posted a 47% drop in its net income from Rs42.594bn (US$797.5m) in 2011 to Rs22.757bn (US$426.1m) in the financial year ending 31 March.
“The major reasons for this decline are: EBIT drop in India by Rs11.09bn [US$207.58m], higher net interest costs of Rs8.4bn [US$157.46m], lower forex losses by Rs2.75bn [US$51.49m] and higher tax charges of Rs4.5bn [US$85.17m],” the company said in a statement.
It also reported debt of US$11.74bn against US$12.71 the year before. In late March, the carrier raised a further US$500m notes in addition to the US$1bn bond it issued a few weeks before that.
Amid declining profits, Bharti has consolidated its position in Uganda and Bangladesh, with the recent acquisition of Warid Uganda and the buyout of Airtel Bangladesh.
