Bharti Airtel to acquire 4.7% stake in Indus Towers, from Vodafone; Stock down 1.5%

28 Feb 2022 , 10:15 AM

Bharti Airtel Limited is going to buy a 4.7% stake in Indus Towers, from Vodafone. It has entered into an agreement with Euro Pacific Securities Ltd, an affiliate of Vodafone Group Plc for the acquisition of a stake in the tower infrastructure company.

At around 10.18 AM, Bharti Airtel Ltd was trading at Rs677.25 per piece down by Rs11.2 or 1.63% from its previous closing of Rs688.45 per piece on the BSE.

“Bharti Airtel has entered into an agreement with Vodafone to buy 4.7% equity interest in Indus Towers on the principal condition that the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea Limited (VIL) and simultaneously remitted to Indus Towers to clear VIL’s outstanding dues,” the company said in a filing on Friday.

It further said, the said acquisition purchase would be at an attractive price representing a significant discount typically available for such large block transactions. In addition, Airtel is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022. This shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers.

Any such acquisition shall only be done when such proceeds are confirmed to be utilised by Vodafone to infuse as equity into VIL including any regulatory or shareholders’ approval being fully obtained.

“We believe this transaction allows Airtel to secure continued strong provision of services from Indus Towers, protects and enhances Airtel’s value in Indus Towers, enables it to receive rich dividends and as also paves the way for subsequent financial consolidation of Indus Towers in Airtel.

We believe that this self-paying capital allocation serves multiple strategic purposes for Airtel. Airtel remains committed to look at opportunities for monetizing this vital asset at an appropriate time. In doing so it will ensure that the tower company has been stabilized and any new strategic or financial investor/s has the ability to continue to serve the critical needs of Airtel,” company said.