Bharti Airtel to increase stake in Airtel Africa in stock swap

(Sharecast News) - Airtel Africa tumbled on Wednesday after majority shareholder Bharti Airtel said its board had approved the issuance of up to 146.7m shares to Indian Continent Investment (ICIL) in exchange for up to 16.3% of Airtel Africa shares. ICIL is an investment firm owned by the family of billionaire Sunil Bharti Mittal. It operates as an investment arm for the family's holding company, Bharti Global.

Bharti Airtel, which has a 63% stake in Airtel Africa, said in a filing that the shares will be issued at 1,923 rupees each - a premium of about 9.5% to the last closing share price - which totals up to 282.2bn rupees. The corresponding shares of Airtel Africa will be acquired at a discount of around 11.6% to the last closing price.

Bharti Aitel said the transaction is in line with its objective of "consolidating/ strengthening its shareholding in a strategic subsidiary".

Bharti said the cashless and leverage neutral transaction is accretive to earnings per share of Airtel India, with additional earnings outweighing the dilution.

At 1420 BST, Airtel Africa shares were down 11.4% at 366.80p, having surged on Monday after Bharti said it was considering lifting its stake.