Bharti Enterprises to engage in PE activity

Bharti Enterprises, the parent company of Airtel, plans to get into the investments space by being strategic partners in new businesses. The company has roped in Mr. Prakash Nene, a senior ICICI Ventures executive as corporate director, investments and new opportunities to spearhead the initiative with the mandate to identify new business opportunities where Bharti Enterprises can invest. He would report directly to Mr. Sunil Mittal.

Bharti Enterprises is the parent company of the Sunil Mittal group with investments in Bharti Airtel, financial services venture Bharti-AXA and fresh food and vegetables distribution business Field Fresh. The group is making a foray into the retail business through a wholly-owned subsidiary Bharti Retail.

Bharti Enterprises has surplus cash and is looking at new investment opportunities to deploy these funds in an optimal manner. The company is clear that it does not want to be a mere financial investor and wants to invest with a long-term horizon and help the investee company or business in creating value. It is possible that the company may also incubate new businesses.

Bharti Enterprises will also look at investments in mutual funds and sundry other financial instruments. Bharti Enterprises move to enter the strategic investment space is in line with other business families and high net worth individuals who have branched out into private equity. Prominent examples include Azim Premji, who has started Azim Premji Investments, and Dabur’s Burman family who have made investments in their personal capacity in companies such as Punjab Tractors and Vishal Mega Mart. Bharti Enterprises will differentiate itself from others in that it will make direct investments as a company and play a far more active role.

Read more in The Economic Times article.

SingTel keen on acquiring Vodafone’s 10% stake in Bharti

SingTel has formally conveyed its interest in Vodafone’s 10% stake in Bharti Airtel to the British company and its advisors UBS. Vodafone has initiated talks with SingTel, Singapore’s largest telecom group, to sell its 10% stake in Bharti Airtel. As per law, Vodafone would have to dilute its holding in Bharti Airtel, if it wins the $18 bn auction of Hutchison Essar. At present, SingTel owns 30.5% stake in Bharti Airtel. Bharti Airtel is India’s biggest mobile operator with more than 30 mn customers. India is the world’s fastest growing mobile market. Analysts forecast the country will have 500 mn users by 2010.

Read the article in The Economic Times article.

Vodafone also in the race for Hutch

After Reliance, Maxis, Bharti and Essar itself, the Hutch-Essar JV seems to have found a new suitor. It seems that Vodafone, the British telecom giant, is reported to bid for Hutch-Essar. UBS, which is Vodafone’s house banker, is said to be advising the company on financing and acquisition strategies.

Both Vodafone and UBS have refused to comment on the development.

Vodafone is selling its stake in its holdings across market as it faces severe investor backlash. It sold its 25% stake in Swisscom for about $3.5 billion and a similar stake in a Belgian wireless operator to Belgacom; before that it had exited companies in both Sweden and Japan. The Japanese transaction was valued at about $16 billion.

In India, Vodafone has invested in a 10% stake in Bharti Airtel, the value of which now is estimated to be around Rs. 16, 000 crores. Vodafone might consider selling its stake in Bharti for financing the acquisition.

Read the article from The Economic Times.

Ambani goes for the kill, to buy out Ruia’s stake as well

Finally, Anil Ambani has made his intentions absolutely clear. Reliance Communications will buy out Hutch-Essar in its entirety. Nimesh Kampani, representing the Ruias is believed to have held meetings with Anil Ambani. Various parties as interested in buying out Hutchison’s stake in Hutch-Essar are doing the rounds of investment circles. These include Ruias themselves raising debt from banks and buying Hutch’s stake in the JV. Bharti’s Mittals are also heard to be interested in buying out the company. Even the name of the Tatas has been mentioned. Maxis, the Malaysian telecom company, is also set to bid for Hutch-Essar. The Ruias stand to gain around $4-5 bn if they sell their stake to Reliance Communications. Ruias are being advised by Morgan Stanley and Goldman Sachs. UBS is advising Ambani on the deal. Buyout funds like Blackstone, Texas Pacific, Carlyle and Kohlberg Kravis Roberts, among others, are supporting Reliance to structure the financing. With about $10 billion through cash to buy equity and around $2-4 billion as debt from major foreign banks, Reliance seems to be the frontrunner in getting the Hutch-Essar telecom business.

Read the article from Business Standard.