Bharti Airtel: Saved by Africa
Bharti Airtel (BHARTI IN) (“Bharti”)’s management announced on 24-October that it would sell a minority stake in Airtel Africa Ltd. (AA), its UK-based mobile operator in 14 African countries for USD1.25bn. The transaction, in effect, put post-money equity valuation of the company’s African business of USD4.4bn with the enterprise value at USD8.15bn.
The share sale will be subscribed by Warburg Pincus, Temasek Holdings, Singtel (ST SP), and Softbank Corp (9434 JP). Management intends to subsequently take AA public through an IPO at a later date. Management indicated the sale proceeds would be used to reduce Bharti’s debt and to stay competitive as the low tariff pricing continues. The stake sale was finalized more than a month earlier than expected.