Bharti Airtel and Vodafone Group would look to reduce their stakes in Indus Towers to about 13% each

Reports confirm that Vodafone Group Plc and Bharti Airtel are in discussions with a KKR-led consortium to reduce their stakes in the tower company that will be formed by the merger of Indus Towers and Bharti Infratel.

Sources familiar with the matter stated that the mutual entity is being valued at $12-13 billion and after merging of Indus and Bharti Infratel, Bharti Airtel and Vodafone Group would look to reduce their stakes to about 13% each.

Merger of these two tower companies, which has been in the works for about a year now, is anticipated to come to a completion soon.

Apparently, after the merger Vodafone Group and Bharti Airtel, which currently hold 42% each in Indus Tower, will own 29.4% and 37.2% stake in the firm, respectively. Along with this, Canada Pension Plan Investment Board or CPPIB and KKR will hold a combined share of 6%, resulting from their stake of more than 10% in Bharti Infratel.  

Presently, Vodafone Idea owns more than 11% in Indus and is anticipated to exit at the time of merger.

Sources further added that post the merger, Vodafone Group and Bharti Airtel would slash their stakes by selling primarily to KKR and other minority part to Canada Pension and others. In the merged entity, KKR could ultimately hold around 25% to 32% interest, having more than 160,000 towers, with CPPIB and others holding minority stakes.

Seemingly, if the merged entity is being valued at $13 billion, then Bharti Airtel could raise around $3.2 billion (Rs22,400 crore) by lowering its stake from over 37% to 13%, whereas the Vodafone Group could raise about $2.1 billion by lowering its holding to 13%.

The merger of Indus Towers and Bharti Airtel is set to come up for being approved at National Company Law Tribunal (NCLT) on 14 May.
Source Credit: https://economictimes.indiatimes.com/industry/telecom/telecom-news/bharti-voda-in-talks-with-kkr-for-stake-sale-in-tower-venture/articleshow/69137606.cms