Bharti Telecom buys 3.33% 0f Airtel's shares from Singtel

"Singtel and its affiliates have agreed to transfer 3.33% shares to BTL for an aggregate price of approximately 2.25 billion SGD, leaving direct shareholding of Singtel and Bharti in Airtel at 10% and 6% respectively,"

Bharti Telecom (BTL), the promoter company of Bharti Airtel, would receive 2.25 Billion Singapore Dollars(SGD) from Singapore Telecommunications (Singtel) in exchange for its decisions to sell a 3.33% stake in Bharti Airtel.

Following the stake sale, Singtel's actual ownership in Sunil Mittal-led Airtel will fall to 29.7% from roughly 31.72% currently and be worth approximately 22 billion SGD. 10.5% direct stake and a 19.2% indirect interest through BTL will make up its smaller position in Airtel.

"Singtel and its affiliates have agreed to transfer 3.33% shares to BTL for an aggregate price of approximately 2.25 billion SGD, leaving direct shareholding of Singtel and Bharti in Airtel at 10% and 6% respectively," BTL stated in its exchange filing on Thursday.

It further stated that the transaction will take 90 days to complete and that BTL and Singtel have agreed to gradually equalise theior ownership holdings in Airtel. Such acquisitions will be spread out and calibrated by BTL to keep a comfortable level of leverage. On the BSE, Airtel shares increased 1.54% to Rs 750.30 in early Thursday trading. The telco's market value increased to almost Rs 4.17 lakh billion as a result.

According to Singtel, the stake sale would release about 2.25 billion SGD as a part of the Singtel Group's capital recycling plan, and the deal is expected to result in a net gain on divestiture for the South Asian telecom of about 0.6 billion SGD.

The first-ever sale of Airtel shares aims to close that gap by demonstrating the substantial value of our holdings in the company. Taking advantage of monetization opportunities that enable us to improve total shareholder returns and raise our return on invested capital is also a component of our capital management strategy, Singtel said in a statement to the media on Thursday.

Singtel however, asserted that it is still a long-term investment, having put over 1.3 billion SGD into Airtel over the previous 3 years. As Airtel continues to reshape India's digital economy with 5G, we remain devoted long-term investors and look forward to releasing the company's substantial long-term growth potential. Singtel's Group Chief Financial Officer, Arthur Lang made the assertion in a public statement.

Currently, the Mittals and Singtel possess 50.56% and 49.44% of BTL, which holds 35.85% of Bharti Airtel respectively. Additionally, through investment businesses, Singtel and the Mittal family directly own 14% and 6.04% of the company respectively. Following the conclusion of the most recent agreement, these will now change.

The Mittal family now holds an effective interest of 24.13% in Bharti Airtel whereas Singtel holds 31.72%.