Big plans

New Delhi, Dec. 28: Seven international investors, including the Singapore government’s Temasek and securities firm Goldman Sachs, have agreed to buy up to 9 per cent in Bharti Infratel — the tower arm of Bharti Airtel — for $1 billion.

The other investors are Macquarie, Citigroup, India Equity Partners, the Investment Corporation of Dubai and AIF Capital. Temasek will acquire more shares than the other entities.

“The enterprise valuation has been agreed to be in the range of $10 billion to $12.5 billion, and the final valuation, within this range, will be determined on the basis of Bharti Infratel’s actual operating performance in financial year 2008-09,” said Bharti Infratel in a statement.

Akhil Gupta, joint managing director of Bharti Airtel, said the company was raising about $1 billion by selling between 7 per cent and 9 per cent stake. Officials were unwilling to specify the percentage of equity that will be sold finally.

“The money raised will be used for rolling out new towers. The board is yet to take a final decision on the rollout of towers and capex (capital expenditure plans),” he said.

Bharti Infratel owns about 20,000 towers in seven telecom circles and holds approximately 42 per cent stake in Indus Towers, a joint venture among Bharti Airtel, Vodafone Essar and Idea Cellular.

The seven circles where Bharti Infratel operates are Jammu & Kashmir, Orissa, Bihar, Assam, the Northeast, Himachal Pradesh and Madhya Pradesh.

Bharti Infratel and Indus Towers will provide passive infrastructure services to all wireless telecom operators in India, the statement said. Indus Towers is the world’s largest independent tower company with around 70,000 facilities.

“Sharing passive infrastructure saves capital and operating expenditure and improves capital efficiency for all wireless operators, enabling quicker rollout of services especially in rural areas,” said Bharti Infratel.

Many telecom companies are hiving off tower businesses into independent units and selling stakes. Earlier this month, Tata Teleservices said it would divest up to 49 per cent stake in its 100 per cent tower subsidiary, Wireless TT Infoservices Limited.

In July, CDMA mobile operator Reliance Communications sold a 5 per cent stake in its tower company for Rs 1,400 crore. It is looking to sell up to 36 per cent equity through an IPO or further placements.

Spice Communications is also planning to sell its tower arm to Srei Infrastructure at an estimated value of Rs 500 crore.