Bharti Group has secured around $1.8 billion from Barclays to acquire a 24.5% stake in the UK’s BT Group. This move is part of Bharti Global’s plan, the international arm of Bharti Enterprises, to purchase the stake through Bharti Televentures. The initial acquisition involves a 9.99% stake via an open market trade, with the remaining 14.51% pending regulatory approvals.
Acquisition from BT’s Largest Shareholder
Bharti is acquiring this stake from Altice UK, BT’s largest shareholder. Following the announcement, BT’s stock price jumped over 10%, bringing its market value to $18.55 billion. Bharti plans to fund the acquisition with a combination of cash and debt, with the specifics of additional debt to be decided later.
Strong Financial Backing
A Bharti spokesperson declined to comment on the details. According to sources, international banks are willing to provide loans for a five-year term, citing the robust financial health of Bharti Enterprises (Holding), or BEHPL. In March, rating agency ICRA noted that BEHPL’s subsidiary, Bharti Enterprises Ltd, had secured external debt backed by sufficient liquid assets, resulting in minimal net debt.
Bharti Telecom’s Financial Position
Bharti Telecom, the parent company of Bharti Airtel, reported an external debt of Rs 24,950 crore as of March 20, against investments valued at Rs 2.75 lakh crore, indicating a solid financial cushion.
Concerns over Loan Pricing and Market Conditions
However, there are early concerns about the pricing of the additional loan and the interest rate spread over the SOFR (Secured Overnight Financing Rate). A source mentioned that the discussed spreads are very narrow, reflecting the current global market conditions.
Bharti Group’s Intentions with BT
SOFR is a key benchmark rate for US dollar loans. Bharti Group clarified that it does not intend to seek control of BT, nor is it aiming for a seat on the board, as confirmed by Chairman Sunil Mittal. He also stated that Barclays acted as the financial advisor and provided the necessary funding for the transaction, which is expected to conclude in the coming months.
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