Bharti Airtel to buy 4.7% in Indus Towers from Vodafone Group

The telecom major on Friday said it has entered into an agreement with Vodafone Group Plc. to buy 4.7% equity in Indus Towers.

The acquisition will be done on the principal condition that the amount paid will be infused by Vodafone as fresh equity into Vodafone Idea (VIL) and simultaneously remitted to Indus Towers to clear VIL's outstanding dues.

The financial details of the deal have not been disclosed.

"With the likely introduction of 5G in the future, we believe a lot more infrastructure would be required in which Indus Towers, an undisputed leader, has a significant role to play and partake in the potential growth in the business," Bharti Airtel said in a statement.

It added that the stability and sustenance of a specialised and strong infrastructure company like Indus Towers is vital for a continued strong provision of co-location services including the support to rollout 5G. Such stability warrants a strong and stable shareholding structure to ensure financial stability and flexibility to respond to evolving needs of telecom operators, it said.

Bharti Airtel said acquisition purchase "would be at an attractive price representing a significant discount typically available for such large block transactions". In addition, Bharti Airtel is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on 24 February 2022, it said.

"This shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers," the company said.

Any such acquisition, it added, will 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," it said, adding that this self-paying capital allocation serves multiple strategic purposes for Airtel.

Bharti Airtel said it remains committed to look at opportunities for monetising this vital asset at an appropriate time. In doing so it will ensure that the tower company has been stabilised and any new strategic or financial investor/s has the ability to continue to serve the critical needs of Bharti Airtel.

Indus Towers is formed by the merger of Bharti Infratel and Indus Towers. It has over 184,748 towers and 335,106 co-locations (as on 31 December 2021) and a nationwide presence covering all 22 telecom circles. Indus' leading customers are Bharti Airtel (together with Bharti Hexacom), Vodafone Idea and Reliance Jio Infocomm.

Bharti Airtel is a global communications solutions provider with over 480 million customers in 16 countries across South Asia and Africa.

Shares of Bharti Airtel rose 2.64% to end at Rs 688.45 on Friday, 25 February 2022.

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