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Airtel Prepays Domestic Loans Worth Rs 22,000 Crore

In order to expand its 4G network and buy additional spectrum, Bharti Airtel has prepaid over Rs 22,000 crore of rupee-denominated domestic loans to multiple banks using a majority of Rs 25,000 crore rights issue proceeds, The Economic Times reported, citing sources aware of the development.

The telecom company has prepaid about Rs 6,000 crore to Axis Bank, and cleared additional loans up to Rs 16,000 crore to other banks including State Bank of India (SBI), ICICI Bank and HDFC Bank which it needed to finance working capital, one of the sources said, as mentioned in the report.

Any prepayment of rupee loans, upwards of Rs 22,000 crore, would translate in a near Rs 2,000 crore reduction in Airtel’s annual net finance costs, improving leverage and boosting its credit rating, Rajiv Sharma, co-head of Research at SBICap Securities, told ET.

Typically, rupee-denominated loans attract 8.5-9 percent interest, which is higher than the rate on overseas loans, the report added.

However, when approached by ET, there was no response from Airtel, as well as the lenders.―CNBC TV18

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