NEW DELHI: Bharti Airtel on Wednesday said it will acquire 20% stake in its DTH arm Bharti Telemedia from an affiliate of Warburg Pincus for about Rs 3,126 crore. The Warburg Pincus affiliate, Lion Meadow Investment, had acquired the equity for Rs 2,310 crore in 2018.
The transaction will be discharged primarily via issuance of about 3.64 crore equity shares of Airtel at a price of Rs 600 per share and up to Rs 1,037.8 crore in cash, Bharti Airtel said.
“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… A full control and ownership over Bharti Telemedia allows Airtel to offer differentiated and converged solutions to customers so as to promote ‘One Home’ strategy,” the company added.
Airtel said it will issue its shares to the Warburg Pincus affiliate at a premium of about 0.5% to the floor price determined as per ICDR (Issue of Capital and Disclosure Requirements) regulations.
“The remaining consideration of Rs 937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding Rs 100 crore,” it said.
Bharti Telemedia DTH business had reported 1.7 crore subscribers as of December 31 last year.
“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,” Harjeet Kohli, Group Director, Bharti Enterprises said.
He said Airtel has had a close and strategic partnership with Warburg Pincus, across its business verticals and geographies. “We are delighted to have them back as part of Airtel’s exciting journey ahead, including in digital businesses,” Kohli said.
The DTH business of Airtel had recorded around 6% growth in the third quarter ended December 31, 2020 on a year-on-year basis.
“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,” Vishal Mahadevia, managing director and head of Warburg Pincus India said.
Airtel said it has set up a special committee to evaluate options for reorganising its businesses and shareholding structure, as the company sharpens focus on its digital and non-telecom businesses.