Airtel shortlists banks for telecom masts unit IPO

Dubai sovereign wealth fund owns minor stake in Indian telco's mast unit
The IPO would help Bharti Airtel unlock the value of its network assets.
The IPO would help Bharti Airtel unlock the value of its network assets.

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The telecommunication masts unit of Indian mobile phone carrier Bharti Airtel, in which a Dubai sovereign wealth fund owns a minor shake, has shortlisted banks to manage a share flotation aimed at raising more than US$750m, two sources with direct knowledge of the matter told Reuters.

The biggest Indian mobile phone carrier has shortlisted Standard Chartered, JPMorgan, Bank of America Merrill Lynch, HSBC, UBS and India's Kotak Mahindra for the initial public share offer (IPO), the sources said on at the weekend.

Bharti may file a prospectus for the IPO with the Indian market regulator next month, said the sources, declining to be named as they are not authorised to speak to the media.

The unit, Bharti Infratel, is eyeing a listing in the first half of 2013, the sources said.

Bharti declined to comment.

Bharti Infratel, which has more than 33,000 mobile phone masts, also holds a 42 percent stake in joint venture Indus Towers, which is the world's biggest telecoms mast company, with about 110,000 masts.

Mast companies get their revenue from leasing infrastructure to network operators but they are going through a tough time in India currently as a Supreme Court order to revoke the regional operating licences of eight mobile phone companies in the 15-player market has weighed on demand for masts.

Bharti Airtel owns 86 percent of the Infratel unit, with the remainder held by investors including Temasek Holdings, Kohlberg Kravis Roberts & Company, Goldman Sachs, Macquarie Group, Citigroup, Investment Corporation of Dubai and AIF Capital.

Bharti Airtel said this month it was considering a sale of up to 10 percent of Infratel in the IPO.

Bharti Airtel, which in 2010 acquired in a US$9bn deal the mobile operations in 15 African countriesof of Kuwait-based telecoms group Zain, had net debt of about US$12bn at end-June.

The company has reported 10 consecutive quarters of profit decline, hit by fierce competition in its home Indian market and also weighed on by losses in its African business.

Its shares are down about 28 percent so far this year after a slew of brokerage downgrades in August, underperforming the broader market that is up more than 16 percent.

* With Reuters

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