Published: Tue, March 13, 2018
Research | By Jody Lindsey

Bharti Airtel board approves mega Rs 16500 crore fund-raise

Bharti Airtel board approves mega Rs 16500 crore fund-raise

The development assumes importance in the wake of intense competition in the telecom sector triggered by the entry of a new player Reliance Jio.

The board of the company approved "issuance of non-convertible debentures (NCDs) of up to Rs 10,000 crore on a private placement basis" and "issuance of foreign currency bonds up to a limit of United States dollars 1 billion or equivalent in one or more tranches", Airtel said in a regulatory filing. The Mukesh Ambani-controlled company hit the revenue streams of rivals, first through free offerings and later through cut-price data tariffs.

As per transaction details then disclosed, Bharti Airtel would sell 15% of its DTH arm to Lion Meadow Investment for Rs 1,623.76 crore, while the balance would be sold by a Bharti promoter entity which owns 5% in company. Its net debt excluding the deferred payment liabilities to the department of telecommunications and finance lease stood at Rs44,677 crore which implies that its spectrum related obligations to the telecom department stood close to Rs47,037 crore as of 31 December. Also, it is proposing to issue foreign currency bonds up to a limit of $ 1 billion. The money will be used to reduce debt.

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"A part of the aforesaid stake shall be utilized for completion of the Bharti Telemedia stake sale to the Warburg Pincus Group", the company said in another regulatory filing.

Earlier, Bharti Airtel raised funds from its tower subsidiary Bharti Infratel.

According to an announcement, BTL is a promoter company of Bharti Airtel Limited (BAL), a company whose shares are listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Ltd (NSE). Earlier this year, the third largest player Idea Cellular, which is set for a merger with Vodafone, had raised Rs 6,750 crore.

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