A consortium led by US private equity company KKR is looking at several big deals which would change the shape of India’s telecoms infrastructure market, The Economic Times (ET) reported.
US-based KKR is heading a consortium comprising Canada Pension Plan Investment Board (CPPIB), Abu Dhabi Investment Authority and GIC Singapore.
According to the paper, in the first stage Bharti Infratel will acquire either all, or most, of the 58 per cent stake in Indus Towers it does not currently own. This is currently held by Vodafone India, Idea Cellular and Providence Equity Partners, and Vodafone may retain a stake of up to 10 per cent.
Indus has a portfolio of 123,000 towers.
Bharti Infratel’s move would cost in the region of $5.5 billion to $6.5 billion and be conducted as “a leveraged buyout that will largely be funded out of the reserves and cash flow of Indus Towers”, a source told ET.
Once this happens, the KKR-led consortium will increase its interest in Bharti Infratel from 10 per cent currently to around 45 per cent, becoming the single largest shareholder.
Bharti Airtel owns 61.65 per cent of Bharti Infratel, while KKR and CPPIB have a 10.33 per cent stake after a $954 million investment made earlier this year.
The talks reportedly started 15 months ago, and have become serious in the past few weeks. A deal could be signed by end of October or in early November.
Vodafone is apparently acting for all of the potential Indus sellers. Bharti Group chairman Sunil Mittal has been leading the discussions with Vodafone Group CEO Vittorio Colao and KKR executives, the report said.
The consortium is in talks with global banks regarding financing and plans to approach the necessary regulators.
It faces competition from Canada’s Brookfield, which is also pursuing Indus Towers after a tower deal with Reliance Communications is now on uncertain ground.
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