Bharti Telecom to raise ₹7,600 cr through block sale of Airtel shares

Bharti Telecom, the parent company of Bharti Airtel, plans to raise $1 billion (around ₹7,600 crore) through a block deal with a floor price of ₹558 per equity share.

According to sources in the know, the deal (100 per cent secondary placement) is expected to be put through on Tuesday and the promoters plan to sell up to 2.75 per cent in Bharti Airtel.

As per this deal, Bharti Telecom, which holds a 38.79 per cent equity stake in Bharti Airtel, will reduce its holding by up to 2.75 per cent. The total promoter shareholding as per the exchange data is pegged at 58.98 per cent.

Cleaning up debt

However, promoters Bharti Telecom/ICIL/Singtel will continue to hold more than 56 per cent in Airtel, said experts tracking the deal. This deal will also clean up the debt overhang at Airtel and create full capacity at Bharti Telecom for further capital or shareholder support as needed at Airtel.

Sources also said no guidance will be given on pricing until the equity shares are crossed on the stock exchange on May 26 and investors indicate demand sensitivities across the price range.

The settlement date for the deal has been fixed as May 28.

There is also no assurance that any order for the equity shares will be met in part or full, principally due to the operational mechanics of Indian stock exchanges.

Allocation of equity shares to foreign portfolio investors is subject to the headroom available for acquisition of these shares by such investors as per the investment limits prescribed under applicable Indian laws, according to the deal mechanism.

Airtel shares closed at ₹593 apiece on the BSE last Friday, down 0.21 per cent from the previous close.