Airtel won’t buy back stake held by Vodafone: Mittal

Bharti group Chairman Sunil Mittal said on Thursday that he has no intention of buying back the 4.4-per cent stake that Vodafone, a rival telecom operator in India, holds in Bharti Airtel.

"We have no intention (of a buyback)," Mittal told reporters after the company's annual general meeting, when asked whether the company would buy back its shares owned by Vodafone following new telecom rules that bar companies from holding a stake in competitors.

In a letter to the telecommunications ministry in July, Vodafone said it holds a 4.4-per cent stake indirectly in Airtel. Vodafone will have to sell this stake following new norms that bar a telecom operator from holding any kind of stake in competitor companies.

Vodafone and Airtel currently operate on Unified Access Service Licence (UASL), or 2G licences, under which telecom companies are permitted to hold stake up to 9.9 per cent in other firms.

However, under per the new rules, telecom service providers operating under previous licences will have to migrate to new licences on expiry of their permits and sell stakes held by them in any rival within a year of getting UL.

Vodafone's three permits – for the lucrative circles of Delhi, Mumbai and Kolkata - will expire in last quarter of 2014. The last 2G licence of Vodafone, issued for Madhya Pradesh area, is valid till 2027.

Two permits of Airtel in Delhi and Kolkata will also expire in November 2014, while some of its licences are valid up to 2024.

On impact of depreciating value of rupee on foreign debts that company has taken, Mittal said, "We have always said our debt is at comfortable level. Our 2.5 debt to EBIDTA ratio is at very comfortable level. Most of other companies are at 3 and some are even at 4. Our debt situation is very comfortable."

The company's net debt in dollar terms was $11,738 million as on 31 March 2013.

Mittal also denied reports of Airtel planning to acquire Mumbai-based Loop Mobile.