Date:21/05/2005 URL: http://www.thehindubusinessline.com/2005/05/21/stories/2005052101190500.htm

Back SingTel raises stake in Bharti Telecom to 32.8%

Our Bureau

Bharti Tele-Ventures said that the company's board has decided not to proceed with the sponsored ADR secondary offering of up to 200 million equity shares.

New Delhi , May 20

SINGAPORE Telecom (SingTel) has increased its stake in Bharti Telecom to 32.81 per cent from 26.96 per cent for an aggregate cash consideration of approximately $252 million (around Rs 1,100 crore).

Bharti Telecom is the holding company of the listed Bharti Tele-Ventures, which provides telecom services under the Airtel brand. The acquisition will hike SingTel's stake in Bharti Tele-Venture to 30.84 per cent from 28.16 per cent.

Bharti also announced that it has scrapped its plan to float a sponsored ADR, in July, due to lack of sponsorship interest by principal shareholders.

Following the fresh acquisition by SingTel, the Indian promoters, Bharti Enterprises, now hold 45.9 per cent stake in Bharti Tele-Ventures.

"SingTel's increase in stake is an expression of confidence in India," Bharti said. SingTel has bought the shares through its subsidiary Pastel Ltd.

The Singapore firm, controlled by the government there, has been making investments in Australia, Indonesia, Thailand and the Philippines as it faces tougher competition back home.

The company may further increase its stake in Bharti once the Centre comes clear on the foreign direct investment (FDI) policy guidelines.

The Centre had earlier announced an increase in the FDI cap from 49 per cent to 74 per cent. On the BSE, Bharti's shares fell by Rs 1.15 to close at Rs 215.70.

On the proposed ADR issue, Bharti Tele-Ventures said that the company's board has decided not to proceed with the sponsored ADR secondary offering of up to 200 million equity shares. The proposal was initially mooted to allow an exit route for existing investors.

Private equity investor Warburg Pincus, in March, had sold over 6 per cent equity stake in the company for $560 million.

Earlier, it had offloaded another 3 per cent stake for Rs 1,355 crore, at Rs 217 per share.

Before that, Warburg had sold over 3 per cent stake for over Rs 800 crore in August 2004.