INDIA’S Bharti Telecom, a promoter of Bharti Airtel, has sought government nod for the infusion of Rs 49bn or £523 million foreign direct investment (FDI) from Singapore-based Singtel and other foreign entities, a move that would make the country's oldest private telecom operator a foreign entity.
The fund infusion will enhance foreign stakeholding in Bharti Telecom to over 50 per cent that will make it a foreign-owned entity, an official source aware of the development told.
Sunil Bharti Mittal and his family own around 52 per cent stake in Bharti Telecom, at present.
Bharti Telecom holds around 41 per cent stake in Bharti Airtel while foreign promoter entities hold 21.46 per cent stake in the telecom firm. Public shareholders have around 37 per cent stake in the company.
"Bharti Telecom has applied for infusion of Rs 4bn in the company which includes investments from Singtel and some other foreign investors. With this Bharti Telecom will become a foreign entity as majority stake will be held by overseas investors. DoT is expected to approve this investment this month," the source said.
The Department of Telecom had earlier this year rejected Bharti Airtel's FDI application as the company had not provided clarity on the foreign investor.
Total foreign shareholding is 43 per cent in Bharti Airtel, at present. With promoter firm Bharti Telecom becoming a foreign entity, foreign shareholding in the company will cross 84 per cent, the source said.
Bharti Airtel has already been in discussion with Singtel and other entities for fund infusion.
The company in August had informed stock exchanges that Bharti Telecom in order to retire some debt may seek equity from its existing promoter group which may include overseas entity and Singtel in proportionate to its holding.
Bharti Airtel has said that even a marginal increase in foreign equity would take the foreign investment in Bharti Telecom above 50 per cent making it a foreign owned entity.
Bharti Airtel has already applied to raise FDI limit to 100 per cent in the company.
Bharti Airtel board last week approved a proposal to raise $3bn through QIP, stake sale and debt papers as the company owes AGR dues of Rs 430bn to the government.
The company will launch one or more QIPs or offer for sale of equity shares or a combination of similar offers to raise $2bn. Rest $1bn will be raised through debentures and bonds.
(PTI)
With members of the College of Commissioners and Indian ministers and officials in New Delhi last Friday (28)