Qatar foundation sells its entire 5% stake in Bharti Airtel at Rs 9,600 crore

Mail Today Bureau   New Delhi     Last Updated: November 9, 2017  | 11:35 IST
Qatar foundation sells its entire 5% stake in Bharti Airtel at Rs 9,600 crore

Qatar Foundation, a non-profit organisation run by the gas-rich country's royal family, on Wednesday sold its entire 5 per cent stake in India's largest telco Bharti Airtel for Rs 9,600 crore. Three Pillars Pte Ltd (TPPL), an affiliate of Qatar Foundation Endowment, sold 19.98 crore shares in Bharti Airtel via an open market sale.

Three Pillars' representative on board of Bharti Airtel will step down immediately post settlement of the sale, Qatar Foundation said in a statement. The block trade was priced at Rs 481 per share, a discount of 6.4 per cent to Tuesday's closing price of Rs 514.35 on the BSE. In May 2013, TPPL invested Rs 6,800 crore in Bharti Airtel, to strengthen the capital structure and allow further investment for growth. The investment saw TPPL acquire 199,870,006 shares at a price of Rs 340 per share.

Given the sale price of Rs 481 per share, the sale of this stake realises a significant gain for TPPL, the statement said The sale comes at a time when other Qatari firms, including its sovereign wealth fund, are cutting stakes in foreign companies to raise cash and withstand pressure on the economy, which has been hit by sanctions imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since early June.

The Gulf countries cut diplomatic and transport ties with Doha on June 5, accusing it of backing terrorism, a charge which Doha denies. Qatar's sovereign wealth fund, the Qatar Investment Authority, has responded to the crisis by pumping billions of dollars into local banks to shore up their deposits. It has also reduced its stake in upscale jeweller Tiffany & Co, Russian energy giant Rosneft and Swiss bank Credit Suisse. A spokesman for the Bharti Group declined to comment on the Qatar stake sale. Rashed Fahad Al-Noaimi, CEO of investments at Qatar Foundation, is on Bharti Airtel's board.

The proceeds of the share sale will be reinvested as part of the QFE Group's ongoing global portfolio growth and diversification, as it seeks to generate longterm financial returns by investing across a range of asset-classes, industries and geographies. TPPL's representative on Bharti Airtel's Board of Directors will step down immediately post settlement of the sale, the QFE statement added. "We are delighted to have partnered with Bharti Airtel though an important stage of their growth. Bharti Airtel has successfully maintained its marketleading position, and its positive momentum has led to our investment performing well," Rashid Al-Naimi, Chief Executive Officer of QFE said.

UBS acted as sole bookrunner on this transaction. Airtel closed 3.73 per cent lower at Rs 495.15 on the BSE on Wednesday. The buyers included a mix of foreign and domestic institutional investors, said a source who did not wish to be named. The company now holds nil shares in Bharti Airtel. A Bharti Airtel spokesperson declined to comment on the stake sale by the Qatari investor. The stake sale also comes at a time when the Indian telecom market going through a fierce price war unleashed by aggressive new entrant Reliance Jio, backed by billionaire Mukesh Ambani.

The competition in the mobile services market has hit earnings and the financial metrics of large established telecom players and led to a massive consolidation in the industry, with smaller players exiting the market, and others going in for M&A deals to protect their market share.

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