Investment bankers have suggested to the top management of Bharti Airtel to hive off its African telecom tower assets into a separate company and then sell it to its listed subsidiary, Bharti Infratel, at a valuation of $2 billion, reports said.
By doing so, Bharti Airtel would be able to raise the required amount by this way for its own growth and help pay off its high-cost loans, and its infratel arm would be able to expand its business, a banker close to the development said.
Bharti 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.
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.
"This is one of the ideas given to Bharti Airtel's management. Now, it is up to them to take a call on this," a source said. No decision has been taken by Bharti on this so far.
Bharti Airtel owns 80 percent stake in Bharti Infratel which, in turn, owns all the telecom towers hived off by Bharti Airtel earlier. Bharti Infratel also owns a 42 percent stake in Indus Towers, a three-way venture among Vodafone, Bharti and Idea Cellular.
Bharti Airtel owns around 18,370 towers in Africa. Of those, it owns 12,800 towers, while the rest are leased. In India, Bharti Infratel has 34,668 towers in its 11 circles of operation.
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