Bharti buys back 4.99 per cent from Vodafone; awards $2 billion contract to Ericsson
By Our Corporate Bureau | 19 Jul 2007
Mumbai: The Sunil Mittal led Bharti Group has bought back Vodafone's 4.99 per cent direct stake for around $1.4 billion, raising the group's holding in Bharti Airtel to over 50 per cent.
The transaction is part of an agreement with Vodafone, following the UK company's acquisition of controlling stake in Hutch-Essar. Vodafone had said it would transfer its 5.6 per cent stake in Bharti Airtel back to a Bharti Group company for $1.6 billion by November 2008.
"Pursuant to the announcement made in February 2007, Bharti is pleased to announce that one of its group companies has acquired a 4.99 per cent direct interest in Bharti Airtel from Vodafone," a statement from Bharti said.
Vodafone, which bought a 10 per cent stake for $1.5 billion in 2005, still has 4.4 per cent indirect stake in the Bharti group and 0.61 per cent direct stake in Bharti Airtel.
The Bharti group had earlier sold 4.99 per cent indirect stake in Bharti Airtel to Singapore-based private equity firm Temasek for about $2 billion.
The group now has over 50 per cent in Bharti Airtel, the country's largest mobile operator, against the earlier 46 per cent. Singapore telecom major SingTel holds about 31 per cent in the company.
Bharti Airtel, meanwhile, awarded a $2 billion (Rs 8,000 crore) contract to Swedish equipment supplier Ericsson for expanding its telecom network.
The two-year deal is one of the biggest contracts for Ericsson. Under the contract, Ericsson will design, plan, deploy and manage Bharti's GSM network across 15 circles and its pre-paid platform across 23 circles in the country.
In addition, Ericsson will also deliver pan-india integrated device management solutions, enabling usage of advanced data services by all mobile customers of Bharti across retail and enterprise segments.