Airtel Special Panel Clears Raising USD 3 Billion Via QIP, FCCB

Bharti Airtel’s special panel has approved a mega fund raising plan through a $2 billion qualified institutional placement (QIP) at Rs445 a share and a separate $1 billion bond issue of 1.05%, the company said in an exchange filing on Wednesday.

The foreign currency convertible bonds (FCCB) issue, which is due in 2025, includes an initial conversion price of Rs. 534 per equity share and the allotment of the bonds worth $1 billion of 1.50%.

FCCBs are debt instruments denominated in a foreign currency, which can be converted into shares.

The operator, hit by a court verdict that has mandated it to pay dues of Rs. 35,586 crore to the department of telecommunications (DoT) by 24 January, will use a chunk of the proceeds to meet this liability, it had said last week.

“The company proposes to utilize the net proceeds for any payments that may be required to be made arising out of the judgment of the Supreme Court of India delivered on 24 October in relation to a long outstanding industry wide case in respect of the definition of adjusted gross revenue (AGR),” Airtel said on 8 January.

The fundraise exercise comes more than two months after the 24 October order of the Supreme Court upholding the government’s definition of revenue that includes revenue from non-core telecom operations such as rent, dividend and interest income. Licensees have to pay 8% of their AGR as licence fee to DoT. The verdict settled a 14-year dispute between DoT and operators.

Bharti Airtel also plans to use the proceeds from the QIP to augment its long-term resources and strengthen its balance sheet, for servicing and/or repayment of short-term and long-term debts, capital expenditure, and long-term working capital requirements, among others.

The proceeds of the FCCB issue will be used for capital expenditure, repayment of existing debt, and/or any other use as permitted under applicable laws and regulations.―Livemint