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Bharti Infratel said to sound out banks to fund $8 billion Indus Towers deal

LiveMint logoLiveMint 01-06-2017 George Smith Alexander

Mumbai: Bharti Infratel Ltd is sounding out banks about financing a potential offer for a majority stake in Indus Towers Ltd, India’s largest wireless tower operator, people with knowledge of the matter said.

The company, backed by billionaire Sunil Bharti Mittal, is exploring debt fundraising as it weighs a bid for the combined 53% stake in Indus Towers owned by Vodafone Group Plc. and Idea Cellular Ltd, according to the people. A deal could value their holding in closely held Indus Towers at around $8 billion, the people said, asking not to be identified because the information is private.

Any acquisition would add to the $21.8 billion of deals targeting the Indian telecommunications industry over the past three years, data compiled by Bloomberg show. Deliberations are at an early stage, and there’s no certainty Bharti Infratel will proceed with an offer, the people said. The parties haven’t agreed on a valuation, and the deal structure could change, according to the people. Bharti Infratel currently owns 42% of Indus Towers.

Bharti Infratel has a first right of refusal on Vodafone’s stake in the wireless tower owner, the people said. It could face competition from Canadian alternative-asset manager Brookfield Asset Management Inc., which has also been planning to consider an offer for the controlling stake in Indus Towers, people with knowledge of the matter said in March.

Representatives for Bharti Infratel, Idea Cellular and Vodafone declined to comment.

Shares of Bharti Infratel have risen 6.7% this year, giving the company a market value of about Rs678 billion ($10.5 billion). The company may seek to raise funds after boosting its stake in Indus Towers by selling new equity to a private equity firm or other investors, the people said.

KKR & Co. and Canada Pension Plan Investment Board bought a 10.3% stake in Bharti Infratel in March for Rs61.9 billion, according to stock exchange filings. The KKR consortium has approached sovereign funds about joining a potential deal to boost its stake in Bharti Infratel, people with knowledge of the matter said later that month. Bloomberg

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