Singtel, GIC subscribing to Bharti Airtel's rights issue

Singtel is a majority shareholder in Indian telco Bharti Airtel and will remain the largest after the rights issue. If the rights issue is fully subscribed, its shareholding will dilute from 39.5 per cent to 35.2 per cent.
Singtel is a majority shareholder in Indian telco Bharti Airtel and will remain the largest after the rights issue. If the rights issue is fully subscribed, its shareholding will dilute from 39.5 per cent to 35.2 per cent.ST FILE PHOTO

Singtel is outlaying $726.5 million as part of a new rights issue from its regional associate, India's Bharti Airtel.

The telco will subscribe to 170 million new shares at 220 rupees apiece, or 37.5 billion rupees (S$726.5 million) in all, which represents 15 per cent of the 250 billion rupee rights issue.

Sovereign wealth fund GIC will subscribe to about 50 billion rupees worth of rights shares, which were renounced by existing shareholder Bharti Telecom.

GIC is a first-time investor in Airtel, while Singtel is a majority shareholder and will remain the largest after the rights issue. If the rights issue is fully subscribed, its shareholding will dilute from 39.5 per cent to 35.2 per cent.

Airtel is raising around 320 billion rupees to reduce debt - up to 250 billion rupees from the rights issue and 70 billion rupees of perpetual bonds.

Besides Singtel's 15 per cent and GIC's 20 per cent stake in the rights issue, Bharti Telecom and Bharti Group will take up 32 per cent, with the remaining 33 per cent available to the public.

Mr Arthur Lang, chief executive of Singtel's International Group, said: "Our participation in this rights offering... reflects our longstanding commitment to Airtel and the confidence in the future of the Indian market...

HUGE POTENTIAL

With smartphone and mobile data adoption continuing to grow at a rapid rate and the positive momentum from the government's Digital India initiative, the opportunity for growth remains huge.

MR ARTHUR LANG, CEO of Singtel's International Group, on the company's long-term view of the Indian market.

"Our partnership with Airtel spans some two decades and we continue to take a long-term view of India, having recently invested in Bharti Telecom and Airtel Africa.

"With smartphone and mobile data adoption continuing to grow at a rapid rate and the positive momentum from the government's Digital India initiative, the opportunity for growth remains huge."

Mr Gopal Vittal, managing director and chief executive (India and South Asia) of Bharti Airtel, added: "The rights issue reiterates the confidence of our shareholders in the competitive strength and sound business strategy of Airtel. It... shall further strengthen our balance sheet with desired financial flexibility so as to meet future opportunities, particularly in the rapidly transforming Indian mobile market."

A version of this article appeared in the print edition of The Straits Times on March 08, 2019, with the headline 'Singtel, GIC subscribing to Bharti Airtel's rights issue'. Print Edition | Subscribe