Shares of Bharti Airtel were under pressure after its Nigerian unit lost a legal battle against African telecom operator Econet.
Bharti said it will lodge an appeal with the country’s Supreme Court. Econet now wants over $3 billion from Bharti.
Bharti Airtel’s shares ended 2 per cent lower at Rs. 296 as compared to a 1 per cent fall in broader markets.
The case pertains to a 2006 deal in which Celtel, a unit of Zain, bought a 65 per cent stake in Vmobile Nigeria. Zain’s African assets were later acquired by Bharti. Econet owned 5 per cent in Vmobile and claims right of first refusal on Vmobile. Econet now wants over $3 billion from Bharti, which inherited the legal tussle after it acquired Zain’s assets for $9 billion.
Harit Shah, senior research analyst at Nirmal Bang Securities, says though Bharti has the option of moving the Supreme Court, the case can be an overhang now.
“Nigeria is the largest market for Bharti in Africa. And if Bharti loses the case it will be a big negative for the company, adding to its balance sheet stress,” he added.