Bharti Airtel rose 1.78% to Rs 291 at 12:01 IST on BSE after the company announced that six leading global investors have agreed to invest $1.25 billion through a primary equity issuance in Airtel Africa.
The announcement was made before trading hours today, 24 October 2018.Meanwhile, the S&P BSE Sensex was up 147.20 points, or 0.43% to 33,994.43.
On the BSE, 70,000 shares were traded in the counter so far compared with average daily volumes of 26.24 lakh shares in the past two weeks. The stock had hit a high of Rs 298 and a low of Rs 286.90 so far during the day. The stock hit a 52-week high of Rs 565 on 3 November 2017. The stock hit a 52-week low of Rs 277 on 22 October 2018.
Airtel Africa, a UK incorporated subsidiary of Bharti Airtel, announced that six leading global investors comprising Warburg Pincus, Temasek, Singtel, SoftBank Group International and others have agreed to invest $1.25 billion through a primary equity issuance in the company at a post money equity value of ~$4.4 billion. Airtel Africa has seen a turnaround of its business in recent years. This investment demonstrates the confidence of leading global investors in the company's ongoing robust growth and profitability. The investment also reinforces the increased growth potential of the Africa telecommunications sector.
The proceeds will be used to reduce Airtel Africa's existing debt of approximately $5 billion and for growth of its African operations. Airtel Africa subsequently intends an Initial Public Offering and use the proceeds primarily for further reduction of debt.
Airtel Africa is experiencing a healthy revenue growth in voice and data services and also strong performance in the Airtel Money business. Its financial performance continues to improve, having turned positive in terms of net profit and operating free cash flow. In most of the markets in which it operates, Airtel Africa ranks amongst the top two operators. With 4G services live in 9 countries and in process of rollouts in most others, Airtel Africa is well placed to capture a significant market share of the rapidly growing data demand across countries.
The present transaction will not involve any sale of shares by existing shareholders.
Raghunath Mandava, MD and CEO, Africa, Bharti Airtel, said that this primary equity issuance clearly underlines the confidence of leading global investors in Airtel Africa's successful business strategy and its potential to sustain growth and profitability. The transaction will help the company further deleverage its balance sheet and boost its capacity to upgrade networks, expand coverage in different markets and achieve rapid growth of Airtel Money across its operations.
On a consolidated basis, net profit of Bharti Airtel declined 22.36% to Rs 479.60 crore on 8.55% decline in net sales to Rs 20080 crore in Q1 June 2018 over Q1 June 2017.
Bharti Airtel is a leading global telecommunications company with operations in 16 countries across Asia and Africa.
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