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This will be followed by a list that will help the company repay part of its debt and push back competition in the Indian market.
"The proposed transaction is a precursor to the expected listing of the African company in the Overseas Market in which Bharti Airtel aims to raise a similar amount," said one. people. The proposed deal between India's largest telecommunications company and the US private equity firm is expected to value Bharti Airtel's Africa unit at $ 8-9 billion, the person added. .
The two discuss a sale of 10-15% stake for $ 1.25-1.5 billion, said the two people quoted above. Both transactions should be completed by December, said the second person.
Warburg was Bharti's first major investor in the early 1990s. The success of this investment kick-started the private equity boom in India.
More recently, he has also taken a minority stake in the Bharti Direct Satellite Broadcast (DTH) operation.
The money raised will help Bharti Airtel repay part of its debt of 95,000 rupees at the end of March this year.
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<p> He had a debt of over Rs 91,000 crore a year ago, which will help support the company's efforts to stay competitive in the Indian market., where Bharti Airtel declared its first quarterly loss during the January-March period unlike profits in Africa.
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<p> The telco is in the midst of an extended price war that has intensified with the entry of Relio Jio Infocomm in September 2016, which has negatively impacted sales and revenues. to profitability. "Since the African company became profitable, it does not need capital to invest," said the second person quoted above. Bharti and Warburg refused to comment.
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<p> The Bharti Airtel unit, wholly owned by the Netherlands, is the telecommunications holding company of 14 African markets: Nigeria, Chad, Congo-Brazzaville, Democratic Republic of Congo, Gabon, Madagascar, Niger , Kenya, Malawi, Seychelles, Tanzania, Uganda, Zambia and Rwanda.
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<p> The board of directors of the holding company had authorized management to begin exploratory non-binding discussions with various banks or intermediaries in mid-February to assess the feasibility of listing its shares.
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<p> <strong> AFRICAN SAFARI </strong><br />
<br /> Airtel operations in Africa completed their first full year of profitability in March. Net profit rose to Rs 1,827 crore on a turnover of Rs 20,156 crore, marking a turnaround from previous years when losses rose every quarter, resulting in consolidated figures and questioning the strategy of the company. 39, expansion of Bharti on the continent.
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<p> The situation has reversed, the operation in India reporting its first loss in 15 years – Rs 652 crore during the quarter of January to March – plummeted by the continuation of the price war. It managed to avoid a loss at the consolidated level thanks to its operations in Africa, which recorded a quarterly profit of Rs 698.7 crore, against Rs 26.3 crore a year ago. Bharti Airtel reported a consolidated profit of Rs 83 crore, down 78% from one year to the next.
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<p> An overseas registration will help Bharti to get better valuations for business in Africa thanks to lower profit margins than those in India, said a banker. investment with a foreign company.
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<p> "The domestic market is in the midst of price war, which is expected to continue for some time, while the African operation has now more or less stabilized," he said. The proposed transactions – private placement to a private equity firm and subsequent initial public offering (IPO) – will not only allow Bharti to deleverage its balance sheet, but will also allow the company to raise short-term funds by diluting the company's equity holdings. , Bharti Airtel International, in the future.
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<p> "This will be similar to Bharti Infratel, where Airtel raised billions of dollars via an IPO and subsequent sale of shares while holding a significant stake that is diluted to raise new capital in the holding , Bharti Airtel ". one of the people listed above.
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<p> Bharti Infratel is a unit of Bharti Airtel that raised more than Rs 12,000 crores by selling minor stakes in the tower company in separate installments over the past year.<br />
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