Singtel to sign deal with Airtel
Singapore Telecommunications Ltd has entered into an agreement with India’s largest mobile mobile phone service provider, Bharti Airtel Ltd, which will increase its stake by 31.95% in Airtel, in order to maximize the value of its existing business.
As a part of the agreement, Singtel will purchase an additional 730,000 shares in Bharti Telecom, the sponsor of listed entity Bharti Airtel, for an amount between 18,073 million Indian rupees to 30,084 million rupees ($641.3 million).
The reason for the difference in price is the payment schedule, which is spread over more than a year after the agreement commences on Nov.12.
Bharti Telecom, which is a promoter company of Bharti Airtel, holds a stake of around 45.3 percent in Bharti Airtel.
This deal comes at time when Bharti Airtel is looking forward to expand globally. Singtel has been backing Bharti Airtel from the time, the company was looking to acquire a majority stake in South African company MTN Group Ltd.
Although the agreement did not come into existence due to the refusal of Indian govt.to allow dual listing of the shares of the company.
Singtel assured that this acquisition would not have a material impact on Singtel’s earnings per share nor its net tangible assets per share.