Bharti Airtel Bonds Gain After Reported Plans To Cut $7 Billion in Debt

Global investors are purchasing more of Bharti Airtel Ltd.’s dollar-denominated bonds amid signs the wireless carrier is poised to pare debt.

Bharti’s dollar notes due June 2025 gained for the fourth straight day, the longest rising streak since May, according to prices compiled by Bloomberg. The company has plans to retire a substantial part of its debt by utilizing the proceeds from the IPO of its Africa unit, a senior executive said on Monday, asking not to be identified.

Reducing borrowings is a key goal for the firm, which is seeking to bolster its balance sheet to face disruptive competition from billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd. New Delhi-based Bharti is looking to cut its debt in half by March to about 500 billion rupees ($7.07 billion), Economic Times reported on Sept. 19.

An initial public offering of its African unit and completion of equity rights issue in India boosted the company’s buffers, raising available cash to reduce leverage. The bonds have been steadily rising even after the telecommunications company was cut to junk at Moody’s Investors Service earlier this year.

The company had cash and equivalents totaling 33 billion rupees as of end June, 35% higher compared with the previous year, exchange filings show. The proceeds from $750 million Africa unit IPO will boost the buffer further, the executive said.

“Bharti Africa’s IPO will help the company’s plans to deleverage its books,” said Raj Kothari, London-based head of trading at Jay Capital Ltd. “Despite the Moody’s rating downgrade to Ba1, Bharti is still regarded as a favorable credit by international investors.”―Bloomberg Quint