Bharti Airtel, Singtel and Warburg Pincus to Make an Additional Offer of 26% to Dish TV Over its Initial Offer

The trio of Bharti Airtel, Warburg Pincus and Singtel will also have to take over the debt of the digital TV giant. By March 31, 2018, the liabilities stood at Rs 3,154 crore (around $451 million), however, as per the estimates made by SBICap Securities, the debt might have increased to $600 million by December end.

Consortium Will Have to Reduce Stake From 75% Post Merger

It is quite notable that once this merger goes through the total stakeholding of the consortium of companies will be more than the maximum permissible limit of 75% in a listed company. After that, the consortium will have a period of one year to reduce this stake to the allowable limit.

As per the people aware of the matter, since Bharti Airtel’s balance sheet is still laden with debt, Warburg Pincus and Singtel are likely to do the heavy investing. But even then, Bharti Airtel will end up with a sizeable holding in the merged entity because of its 80% stake in Bharti Telemedia, in which Warburg Pincus holds the rest 20% stake. Also, this merger would be Airtel’s move after Reliance Jio did a display of power by acquiring a majority stake in Hathway Cable and Datacom and DEN Networks. Both the telecom operators are looking to gain customers by attacking three fronts of mobile networks, TV distribution and home broadband.

If and when the merger happens, the combined entity will be the biggest TV distribution company in the world with 38 million subscribers and a 61% share of India’s DTH market. Reliance Jio, on the other hand, has control over 24 million cable connected homes after its latest M&A deal.

According to the analysts, since Bharti Airtel’s DTH wing is more clustered in urban cities, it is prone to the attack of Reliance Jio GigaFiber as the company is expected to target 80-100 top tier I and tier II towns when it launches.