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Google invests in Bharti Airtel via preferential issue at Rs 734 per share;  Details here

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Google invests in Bharti Airtel via preferential issue at Rs 734 per share; Details here

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Google has invested in Bharti Airtel through a preferential offering, confirming a CNBC-TV18 news cut. Bharti Airtel’s Board of Directors approved the issuance of shares to Google on Friday and according to the agreement, Bharti Airtel will issue 7.1 crore shares to Google at Rs 734 per share.
This will result in shares worth Rs 5,224.4 crore (about $700 million) on a preferential basis to Google for a 1.28% stake.

According to the press release, Google will invest up to $1 billion for India’s Digitization Fund. The deal includes an iInvestment of up to $300 million for possible multi-year commercial agreements.

The partnership also aims to enable affordable access to smartphones in the country. According to the statement, two companies will work with device makers to remove barriers to owning a smartphone in a price range.

Bharti Airtel shares surged after the news was confirmed and is up 1.6% at press time. Over the past six months, the stock has risen nearly 30%.

Nitin Soni, Senior Director-Corporates, Fitch Ratings expects Bharti Airtel to use the money to repay some of its debt.

“The net leverage excluding deferred liabilities of the spectrum will drop below 1.5 times. We are pleasantly surprised that the company, which already raised $2.8 billion in equity last year, on its own 25% has been called and on top of that they’ve now raised another $700 million, so it’s positive in terms of the balance sheet,” he said.

(Edited by : Abhishek Jha)

First post: STI

Google invests in Bharti Airtel via preferential issue at Rs 734 per share; Details here

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