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Bharti Telecom sells 2.75% stake in Airtel to reduce debt, raises over Rs. 8,433 crore

Promoter Bharti Telecom on Tuesday announced that it has sold 2.75 per cent stake in Telecom major Bharti Airtel raising more than Rs. 8,433 crores (US$ 1.15 Billion) 

“Bharti Telecom today sold 2.75% stake in Bharti Airtel to institutional investors through an accelerated book building process in the secondary market,” the company said in a regulatory filing.  

The sale proceeds will be utilised to fully repay debt at Bharti Telecom, which was raised primarily to finance the acquisition of Bharti Airtel equity shares in the past. 

“With Bharti Telecom becoming a zero debt company, Bharti Airtel’s credit profile will also be augmented as it will stand to benefit from deleveraging on a consolidated basis including any debt of the promoter holding company,” the company said.

The company said, the share allocation was done to over 50 accounts with the top 10 getting 2/3rd of overall allocation. The total sale proceeds of over Rs. 8,433 crores was oversubscribed multiple times by a mixed category of investors, long only and hedge fund investors across geographies in India, Asia, Europe and the US.

“The strong and wide response received from a diverse mix of investors across geographies, even during challenging global macroeconomic conditions, clearly demonstrates the competitive strength and the long term prospects of Bharti Airtel,” Harjeet Kohli, Group Director, Bharti Enterprises was quoted in the statement. 

“With the proceeds, Bharti Telecom Limited will become a zero debt company providing an even stronger financial flexibility and capacity to provide any additional shareholder support as may be desired by Bharti Airtel from time to time,” he added. 

The Promoter Group, Bharti Group and Singtel,  will continue to own a majority stake in Bharti Airtel at 56.23 per cent, even post the transaction.

J.P. Morgan India Private Limited acted as the sole placement agent for the secondary placement.

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