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Airtel to acquire 20 per cent stake in Bharti Telemedia from Warburg Pincus

Part of strategy to align all customer facing businesses under same holding group.

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New Delhi: Leading telecom operator Bharti Airtel is on course to acquire a 20 per cent stake in its direct-to-home television arm Bharti Telemedia from US private equity firm Warburg Pincus for Rs 31,260 million.

The amount will be discharged primarily via issuance of 36.47 million equity shares of Airtel at a price of Rs 600 per share and up to Rs 10,378 million in cash. “The issuance of shares proposed through preferential allotment is subject to shareholders’ approval,” the company stated in its regulatory filing.

The proposed transaction is part of Airtel’s strategy to align the shareholding of its customer facing products, services and businesses under the same holding group.  In December 2017, a Warburg Pincus affiliate, agreed to acquire 20 per cent equity stake in Bharti Telemedia Ltd, the DTH arm of Airtel. A complete 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,” said Bharti Enterprises’ group director, Harjeet Kohli.

Airtel will issue its shares to the Warburg Pincus affiliate at a premium of 0.50 per cent to the floor price determined as per ICDR regulations. The remaining consideration of Rs 9,378 million will be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding Rs 1,000 million.

Managing director and head of Warburg Pincus India Vishal Mahadevia said Airtel was one of the earliest and most profitable investments for the private equity firm 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,” he added.

Citigroup Global Markets India Private Ltd acted as the financial advisor to Airtel and Credit Suisse Securities (India) acted as advisors to Warburg Pincus in connection with this transaction.

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