SingTel ups stake in Bharti Airtel by $302 mn

Singtel & Airtel LogoSingapore Telecommunications Ltd (SingTel), South-East Asia's largest telecom operator, yesterday agreed to increase its stake in India's largest telecommunications company Bharti Airtel Ltd (BAL) by 1.58 per cent to 32.34 per cent paying approximately Rs1,859 crore ($302 million).

Under the deal, SingTel will acquire 788,538 equity shares or 3.62 pre cent of Bharti Telecom Ltd (BTL) the promoter of BAL, thereby increasing its stake in the company to 39.78 per cent from 36.16 per cent.

Currently, BTL owns around 43.6 per cent of BAL.

''The Acquisition would allow SingTel to increase its effective stake in BAL, and is in line with SingTel's strategic focus on maximising the value of its existing businesses, which includes reviewing opportunities to increase shareholdings in existing associates,'' SingTel said in a statement.

The offer price of Rs294.69 per BAL share represents a 10-per cent discount to the volume weighted average share price of Rs327.44 on the BSE and NSE for the prior 30 days.

The acquisition will not have a material impact on SingTel's earnings per share nor its net tangible assets per share for the current financial year ending 31 March 2014, SingTel said.

The all-cash transaction is expected to close by 28 August 2013.

SingTel is majority owned by Temasek Holdings Private Ltd, the investment arm of the Singapore government which holds around 52 per cent stake. Besides Singapore, the group has investments in Australia, Thailand, India, Bangla Desh, Africa, Philippines and Indonesia.

Just a day before, SingTel said that it plans to retain its Australian subsidiary Optus' satellite business, based on a strategic review of the business. (See: SingTel opts to retain Optus' satellite business).

SingTel registered a 7-per cent rise in its net profit at $790 million in the second quarter compared to last year. Revenue for the quarter fell 5.3 per cent to $3.4 billion from $3.6 billion a year ago quarter.

For the June quarter Bharti Airtel reported an expansion in operating profit margin and increase in India mobile services revenue led by increase in average revenue per user.

The company's net profit jumped 35.5 per cent to Rs689 crore over the previous quarter but 10 per cent down compared to last year. Revenues dropped 0.9 per cent Rs20,264 crore on quarter-on-quarter while it was 9 per cent higher than a year ago.

New Delhi-based Bharti Airtel, founded by Indian billionaire Sunil Mittal, is the world's third-largest mobile telecommunications company with a subscriber base of over 261 million. It has operations in 20 countries across South Asia, Africa and Channel Islands and provides 2G, 3G and 4G services.