Bharti Airtel Plans Up To Rs 15,000-Cr Shares Issue To Repay Debt, Cut Borrowing Costs

Bharti Airtel is planning to raise Rs 12,000-15,000 crore in FY19 through an issue of fresh shares to repay debt and bring down borrowing costs, according to a report in The Economic Times.

The company is examining the option of either issuing rights to existing shareholders or private placement to institutional investors and promoters, sources told the paper.

The move is a part of the company’s strategy to raise about Rs 30,000 crore in three tranches to meet capital expenditure, reduce debt and financing costs, and bolster cash flows, the report said.

Moneycontrol could not independently verify the report.

The company has a net consolidated debt of Rs 1,14,557 crore, of which borrowings at Indian operations’ stands at Rs 80,000 crore. This amount includes outstanding spectrum payments of nearly Rs 46,000 crore. The company’s debt, however, is expected to come down significantly, with the international business having a residual debt of about Rs 17,500 crore, a person aware of the development told the paper.

Reliance Jio’s entry in September 2016 with competitive prices, pushed other telecom operators to drop rates, which impacted its rivals’ topline and profitability.

Earlier this week, Bharti Airtel announced that it intends to launch an initial public offering (IPO) of Airtel Africa, its UK-incorporated subsidiary, in mid-2019 on an international stock exchange. The IPO aims to raise $1.25-1.5 billion, which would be used to reduce the debt of the African subsidiary, another source told the paper.

According to the report, the third round of fundraising will be done through equity dilution in Bharti Infratel, which is in the midst of a merger with Indus Towers.

After the merger, Bharti Airtel will hold up to 37.2 percent stake in Bharti Infratel, which will own more than 1.63 lakh towers across India. The company may dilute its stake in the tower business in the latter half of 2019 depending on market conditions, sources told the paper. – Money Control