Bharti Airtel plans to make its African business public in order to reduce its debt. Bharti Airtel International (Netherlands) holds all Bharti Airtel’s African businesses. The company operates in 14 countries.
However, according to Bloomberg Quint, Airtel’s debt would only decline by 15 percent through listing its African business. Last year, Airtel Africa made a profit of $48 million from July to September, resulting in a 5.3 percent growth year on year to $783 million. Bank of America-Merrill Lynch values Bharti Airtel Africa’s equity at $1.1 billion inclusive of about $5.5 net debt.
Analysts said that Bharti Airtel will probably list its subsidiary in the Netherlands in an international exchange such as Nasdaq, Euronext Amsterdam, Luxembourg Stock Exchange, or London Stock Exchange. International markets have well-established capital markets and banking systems with modern financial regulations.
Although the operator has not revealed how much stake it plans on selling, it cannot sell more than 49 percent because it could lose control of its subsidiary. Therefore, its options could include selling 49 percent stake at the times the valuation or issuing fresh shares and proceeds to repay the debt.
