Singapore eyes USD2b stake in Bharti Airtel

5 Jul 2007

The Singaporean government investment arm Temasek Holdings is likely to acquire a 4.9% stake in Indian cellco Bharti Airtel, writes Bloomberg. Given Bharti’s market capitalisation of INR1.63 trillion (USD40.51 billion), the deal could be worth USD2 billion. According to a statement by Bharti, one of its group companies ‘has decided to grant an option to acquire an indirect stake in Bharti Airtel to a wholly owned subsidiary of Temasek Holdings.’ It refused to divulge the amount for which the offer had been made.

Temasek is the largest shareholder in Singapore Telecom, which owns 30.5% of New Delhi-based Bharti Airtel. ‘If at any point of time Temasek wants to sell its stake, Bharti and [then] SingTel have the first right of refusal,’ a Bharti spokesperson said. The stake sale will not result in an equity dilution, because Temasek is indirectly buying a large portion of the 5.6% stake that Vodafone is offloading. When Vodafone struck a deal to pick up a controlling stake in rival cellco Hutchison Essar in February, it said it would sell back its stake in Bharti for USD1.6 billion in two tranches before November 2008. Vodafone had bought the stake from Bharti in 2005. It still has indirect holdings of 4.4%.

India, Bharti Airtel, Singtel Group