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

Bharti Airtel on Friday said it has entered into an agreement with Vodafone Group Plc. to buy 4.7% equity in Indus Towers. However, the acquisition will be done on the principal condition that the amount paid will be infused by Vodafone as fresh equity into Vodafone Idea Limited (VIL) and simultaneously remitted to Indus Towers to clear VIL’s outstanding dues.

While the financial details of the deal have not been disclosed, industry sources peg it to be about ₹ 3,000-3,300 crore.

“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, adding 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.

The company added that the 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 February 24, 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 Bharti Airtel.

Bharti Airtel remains committed to look at opportunities for monetising this vital asset at an appropriate time, the company said, and added that 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.