Bharti Airtel’s board on Wednesday approved the amalgamation of wholly-owned arms, Nettle Infrastructure Investments Ltd, Airtel Digital Ltd and Telesonic Networks Ltd with and into the Sunil Mittal-led parent company. The board also cleared the demerger of the company’s telecom business, and vesting the same with a new wholly-owned arm, Airtel Ltd, on a going concern basis subsequent to the completion of the aforesaid amalgamations.
Both decisions are part of Bharti Airtel’s new corporate structure – unveiled on Wednesday – that will see the listed parent company hold all digital and infrastructure assets while moving the telecom businesses into a newly created subsidiary.
The board approvals are for “a composite scheme of arrangement between Bharti Airtel, Nettle Infrastructure Investments, Airtel Digital, Telesonic Networks and Airtel Ltd and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013,” Bharti Airtel had said in an exchange filing Wednesday evening.
The company added that there would be “no change in the shareholding pattern of Bharti Airtel pursuant to the amalgamation of Nettle, Airtel Digital and Telesonic with and into Bharti Airtel”. At present, directly and indirectly, Mittal-owned entities control about 24% of Bharti Airtel, while co-promoter SingTel owns 31.7%.
Airtel shares initially rose nearly 2% Thursday morning and eventually closed 0.6% higher at Rs 539.20 on BSE on Thursday.
The corporate restructuring move sharpens the Sunil Mittal-led entity’s focus on digital operations and helps monetise them. The new structure will also remove telecom regulatory overhang on Airtel’s digital businesses and reduce statutory liabilities related to its mobility business.
Until this organisational rejig, Bharti Airtel had housed the India telecom business, digital assets under Airtel Digital, international operations including Airtel Africa, the payments bank, data centre under Nxtra, Indus Towers and the direct-to-home (DTH) business under Bharti Telemedia.
Under the new structure, Bharti Airtel, housing the digital assets, becomes the holding company of separate units – the telecom business under Airtel Ltd, Airtel Payments Bank, international businesses including Airtel Africa and the infrastructure business under Nxtra and Indus.
But Bharti Telemedia will eventually be folded into Airtel Ltd to provide better-converged services, Bharti Airtel has said.
Analysts said that moving all digital assets under the listed Bharti Airtel parent entity is akin to what Reliance Industries (RIL) did when it incorporated Jio Platforms (JPL) to house its digital assets while moving the licenced connectivity business to Jio Infocomm as a step-down subsidiary.
Source: Economic Times