The Hindu : Business : Vodafone picks up 10 p.c. in Bharti Tele-Ventures

Online edition of India's National Newspaper
Saturday, Oct 29, 2005

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Business

Vodafone picks up 10 p.c. in Bharti Tele-Ventures

Staff Reporter

All-cash deal worth Rs. 6,700 cr.; largest foreign investment

VODAFONE MAKES A CALL: The Chief Executive Officer of Vadafone plc, Arun Sarin (left) with the Chairman and Group Managing Director of Bharti Tele-Ventures, Sunil Mittal, in New Delhi on Friday. — Photo: Rajeev Bhatt

NEW DELHI: In an all-cash deal worth Rs. 6,700 crore ($1.5 billion), Vodafone, the world's largest mobile service provider with a presence in 30 nations, has acquired ten per cent stake in India's biggest mobile operator, Bharti Tele-Ventures Limited (BTVL). Billed as one of India's largest single foreign investments, the move comes immediately after the Centre's recent announcement increasing the foreign direct investment (FDI) limit in the telecom sector to 74 per cent from 49 per cent.

Vodafone's 10 per cent acquisition includes the entire 5.65 per cent stake, amounting to 106 million shares, of private equity firm Warburg Pincus in BTVL, while the balance 4.4 per cent has come from Bharti Enterprises Ltd through Vodafone Mauritius Ltd. The deal has been made at an average price of Rs. 351 per share. With this, Warburg has completely exited from BTVL, while Asia's leading mobile company SingTel of Singapore has 15.58 per cent shares in BTVL.

`No plans to dilute stake'

Making this announcement at a press conference here on Friday, Bharti Group Chairman and Managing Director Sunil Mittal said: "However, Bharti Enterprises will maintain the controlling interest of 45.9 per cent in BTVL through its subsidiary Bharti Telecom Ltd. We are the largest stakeholder in BTVL and we have no plans to dilute our stake in the company.'' He clarified that the whole Rs. 6,700 crore would not go to Bharti as Warburg would get part of it.

About how to use the money, Mr. Mittal said: "We will use the money for various opportunities in the future. We need to roll out our network faster across India and strengthen our presence in all 23 circles. This is a high growth phase and we will make large investments."

According to Vodafone Group Plc. Chief Executive Arun Sarin: "The latest investment is consistent with Vodafone's strategy of developing the company's global footprint in growth markets where we can create value for shareholders. We have better expertise and experience that will help BTVL. In Asia, India and China are two growing markets and we want to be a partner in this growth.''

Vodafone also announced a grant of $12 million (Rs. 51 crore) to Bharti Foundation for support to primary education throughout the country.

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