Bharti Airtel sells stake to Qatar investment group for $1.26bn Bharti Airtel, the world's fourth largest telecoms company by subscribers, has sold a 5 per cent stake in its business to the Qatar Foundation Endowment for Rs68bn ($1.26bn), as part of a plan to reduce leverage and raise funds for future investments in its African division. The investment values the Indian company, which is controlled by billionaire Sunil Mittal, at $25.2bn, while the offer is at a 7 per cent premium to the group's share price on Friday morning. Bharti's stock rose just over 1 per cent following the announcement. The deal is the latest high-profile purchase by Qatar through its state-backed investment groups, of which the most prominent is the sovereign wealth fund Qatar Holding which has acquired stakes in companies from Tiffany in the US to Agricultural Bank of China. The fund also recently played kingmaker in Glencore's takeover of Xstrata. The move is the first major public investment by QFE, which was established to fund the activities of the Qatar Foundation, one of the energy-rich Gulf state's most prominent investment vehicles and a cultural organisation run by its royal family. In addition to Bharti's domestic operations, where it is India's largest mobile company by revenue, the group also operates in Bangladesh, Sri Lanka and 17 nations across Africa, the legacy of a $10.2bn deal to acquire Zain Telecom in 2010. The Zain deal has since placed a strain on the Indian group's finances. Its performance deteriorating again last year as Thursday's results highlighted, with losses widening across its African operations. People familiar with Bharti's strategy said the decision to accept fresh investment would help the group to reduce net debt, which stood at Rs638bn ($11.8bn) in the last quarter, while also financing further expansion in Africa, which it sees as central to future growth. Speaking after the company's results on Thursday, Manoj Kohli, head of Bharti's international business, said the company would continue to look to buy out the minority shareholders in those parts of its African division that it did not already own outright. In April Bharti bought Warid Telecom Uganda, a unit of Abu Dhabi-based Warid Telecom, and this week it announced it had acquired the remaining 30 per cent stake it did not already own of Warid Telecom in Bangladesh. In a statement Bharti said the QFE deal would "further strengthen the capital structure and provide further flexibility for the company to deliver on its growth strategy." Rashid Al-Naimi, acting chief executive at QFE, said: "As a long-term global investor, our shareholding gives us exposure to a high growth sector in key emerging markets. QFE looks forward to supporting Bharti in realising the full potential of this world class business. A person close to the deal said QFE would get a board seat as part of its investment. Under the terms of the agreement Bharti will issue QFE 199.9m new shares at a price of Rs340 ($6.29) each. Bharti's shares rose more than 4 per cent immediately following the announcement, but fell back to Rs321 at 11.15am in Mumbai, an increase of 1.4 per cent.