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Friday, February 21, 2014

Bharti Airtel loses case against Nigerian

Bharti Airtel has lost a case against Econet wireless international against its Nigerian subsidiary over the ownership issue. (Airtel has 79% stake in erstwhile Zain Nigeira).
The appeal court has declared Econet wireless as a bonafide shareholder of the Nigerian unit, and states that it holds 5% stake in the Nigerian unit and continues with its minority shareholding status, which Bharti had opposed. The legal tussle is long standing before Bharti Airtel acquired Zain.
Sharekhan view: This development is sentimentally negative for Bharti Airtel, as now Econet’s participation as a minority shareholder is required in Nigeria and Nigeria contributes around 30% of the African revenue, further as per the media reports certain fines are also imposed on Bharti Airtel. Bharti Airtel has the option to take the matter in the Supreme Court.
Bharti Airtel closed at Rs296.85, down by 1.98%, with a volume of 2.71 lakh shares on the BSE.