CPPIB, KKR pick up $952m stake in India telco

The pair acquired 10.3% of Bharti Infratel, the telecom tower subsidiary of India’s largest telecom operator.

Canada Pension Plan Investment Board and KKR have teamed up to acquire a 10.3 percent stake in the telecom tower unit of India’s largest telecom operator Bharti Airtel for over INR 61.9 billion ($952 million; €876 million), according to a company statement.

The investors bought over 190 million shares of Bharti Infratel at INR 325 per share.

Bharti Infratel owns and manages over 90,000 telecom towers and communication structures for various mobile operators including Bharti Airtel, Vodafone and Idea Cellular.

The investment will mainly be used to reduce Bharti Airtel’s debt, which amounted to INR 973 billion as of end-December 2016, the company said.

Following the transaction Bharti Airtel will own a 61.7 percent stake in Bharti Infratel, with the remainder owned by fund managers including Fidelity Management & Research Company and Aberdeen Asset Management.

Media reports last year suggested KKR and CPPIB have been eyeing an up to 40 percent interest in Bharti Infratel valued at about $4 billion.

This is KKR’s second investment in Bharti Infratel. The private equity giant invested $250 million in the company in 2008 out of its 2010-vintage $3 billion Asian Fund I and global private equity fund, and sold its stake in 2015.

Commenting on the deal Sanjay Nayar, member & CEO of KKR India, said: “As long-term partners of Bharti Infratel, we have intimately seen the company strengthen its position as a world-class telecom infrastructure provider. We now have a unique opportunity to partner with the company for a second time, and are very excited to work alongside this team to propel Bharti Infratel to the next level of growth.”

KKR is currently investing is second Asian fund, which closed on $6 billion in 2013. It is also in the process of raising capital for its third Asian vehicle, which is targeting $7 billion.

The Canadian pension giant, which has C$298 billion ($224 billion; €207 billion) in assets, is an investor in KKR’s funds including $13.9 billion KKR Americas Fund XII and KKR Asian Fund II.