Bharti Airtel Ltd. has agreed to buy a 4.7% stake in Indus Towers Ltd. from Euro Pacific Securities Ltd., an affiliate of Vodafone Group Plc.
The deal will be made on a condition that the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea Ltd., the India unit, after obtaining all shareholders or regulatory approvals, according to an exchange filing. The amount will be simultaneously remitted to Indus Towers to clear Vodafone Idea’s outstanding dues.
“The acquisition would be at an attractive price representing a significant discount typically available for such large block transactions,” the filing said. “Airtel is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on Feb. 24, 2022. This shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers.”
The company did not disclose the price of the transaction.
On Feb. 23, Vodafone Group had informed the London Stock Exchange that it was in advanced talks with one of the largest shareholders in Indus for the sale of 4.7% of its outstanding share capital. PTI, citing industry sources, said the deal value was pegged at more than Rs 3,300 crore.
Bharti Airtel currently holds 41.73% shareholding of Indus Towers.
According to the carrier, 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”.
The deal will also help Bharti Airtel to protect and enhance its value in Indus Towers and enable it to receive rich dividends. It will pave the way for subsequent financial consolidation of Indus Towers in Bharti Airtel.
