SINGAPORE - Singtel is subscribing to 170 million new shares at 220 rupees apiece, or 37.5 billion rupees ($726.5 million), in the latest rights issue by its regional associate - India's Bharti Airtel (Airtel). This represents 15 per cent of the 250 billion rupee rights issue.
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 an existing majority shareholder; Singtel will remain the largest shareholder post-rights issue. Assuming the rights issue is fully subscribed, its shareholding will dilute to about 35.2 per cent from 39.5 per cent.
Airtel is raising up to 320 billion rupees from rights issue and perpetual bonds to reduce debt. This is broken down to up to 250 billion rupees from renounceable 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 (BTL) & Bharti Group will take up 32 per cent, with the last 33 per cent available to the public.
Arthur Lang, CEO of Singtel's International Group, said: "Our participation in this rights offering with our partners and a leading investor such as GIC reflects our long-standing commitment to Airtel and the confidence in the future of the Indian market. Airtel has performed well despite business headwinds and is consolidating its position in a more sustainable 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."
Gopal Vittal, MD and CEO (India & South Asia) of Bharti Airtel Limited, said: "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."