Bharti Airtel rating unaffected by proposed stake acquisition in Warid Telecom: S&P
13 Jan 2010
Mumbai: Standard & Poor's Ratings Services today said that its rating on India-based Bharti Airtel Ltd. (BBB-/Stable/--) is unaffected by the company's recent announcement to acquire a 70-per cent stake in Warid Telecom International's Bangladesh operations.
Bharti plans to invest $300 million, from its internal cash resources, primarily toward network expansion of Warid's Bangladesh operations. The available information on the operating performance and financial profile of the acquired entity is currently limited.
The proposed acquisition is in line with Bharti's strategy to expand its international operations, especially in emerging markets that provide significant growth opportunities.
S&P expects the acquisition to marginally lower Bharti's liquidity and increase its business risk because of the higher country risk associated with Bangladesh and future investments to improve Warid's weak market position in Bangladesh.
However, the rating agency feels, Bharti is experienced in running low-cost operations in an emerging market, given the company's strong position as an integrated player in the significantly larger Indian telecom market.
S&P does not have a rating on either Warid or a country rating on Bangladesh.