Business Standard 17 May 2013
Investment bankers have suggested that Bharti Airtel’s top management hive off the company’s African telecom tower assets into a separate company and then sell it to its listed subsidiary, Bharti Infratel, at a valuation of $2 billion.
This way, while Bharti Airtel would be able to raise the much-needed funds for its own growth and help pay off its high-cost loans, its infratel arm would be able to expand its business, a banker close to the development said.
Bharti has already initiated the process to hive off its telecom towers in Africa which is expected to be completed by the end of the financial year.
Based on recent valuation of around Rs 88 lakh a tower, Bharti Infratel would have to shell out close to Rs 11,300 crore to buy out the company’s assets, a banker said.
When contacted, a Bharti spokesperson said: “We have no such plans and we deny this speculation.”
The recent acquisitions in the tower business include the deal of Tanzania’s Millicom for 1,000 towers and MTN’s deals in Ivory Coast, Uganda and Cameroon. These transactions were done at enterprise valuation of Rs 7.3 million to Rs 10 million a tower.
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