New Delhi: Bharti Telemedia has agreed to sell 20 percent of its DTH Business to private equity firm Warburg Pincus for $350 million (Rs 2,258 crore).
Apparently, Airtel will sell a 15% stake in the DTH business to Warburg Pincus entity Lion Meadow Investment for Rs 1,623.76 crore, the telecom firm said in a a stock exchange filing on Tuesday. Another group company that holds 5% of Bharti Telemedia will offer its entire stake to the PE firm.
With this deal, BhartiTelemediahas been valuedat close to Rs 11,300 crore, making it India’s second largest DTH player by valuation.The transaction announced also involves Warburg Pincus India’s Managing Director VirajSawhney joining BhartiTelemedia’s board.
They estimate the combined valuation of Dish TV and Videocon, which are in the process of merging, at around Rs 15,000 crore and that of Tata Sky at Rs 10,000 crore. Dish TV is the only listed DTH firm. This is the second time that Warburg Pincus is taking a stake in the Bharti Group.
“Airtel has enjoyed a very successful partnership with Warburg Pincus in the past and we are excited to partner with them once again in an attractive and fast growing space,” said GopalVittal, the telecom firm’s chief executive for India and South Asia.
“The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalise on incremental growth in digitisation and new TV penetration in Tier 3 and 4 towns and rural areas,” said Vishal Mahadevia, Managing Director of Warburg Pincus India.
Airtel has been monetising its non-core assets to pare debt and fund activities to fight intensified competition in the telecom sector. Earlier this year, it sold an 18.5% stake in tower arm BhartiInfratel for Rs 12,000 crore.
At the end of September, it had total debt of Rs 91,480 crore. It had tried sell a part of the DTH business and recently held discussions with the Tata Group. Though that didn’t go through, Airtel agreed to buy Tata’s mobile business under a cash-free, debt-free deal.
It is understood that the earnings will go to BhartiAirtel, the group’s telecom firm, and it will likely be used to fight off competition from Reliance JioInfocomm.