Bharti Telecom to raise USD 1 billion

Bharti Telecom seems poised to raise about Rs 7500 crore by selling a 2.75 percent stake in the telecom giant. The sale is expected to be through block deals on May 26 on the stock exchanges, and is essentially to pare the promoter’s debt. The promoters may sell 150 million shares, and the deal is likely to be at a 6 percent discount to the closing price. Allocating equity shares to foreign portfolio investors is subject to investment limits under Indian law. JP Morgan India is its sole lead banker. With this latest block deal the stake held by the promoters of Bharti Airtel—Bharti Telecom Ltd, Indian Continent Investment Ltd, Viridian Ltd and Pastel Ltd—will fall to 56.23 percent from 58.98 percent.

On May 23, Bharti Telecom, raised about Rs 3,500 crore via commercial paper that offered 6.16 percent on average with a three-month maturity.  Commercial paper, typically, is a short-term debt instrument with less than one-year maturity.

In January, Airtel allotted USD 2 billion worth of equity shares to institutional investors to pay the AGR dues to the central government. The company will also raise an additional USD 1 billion as convertible bonds, due in 2025, according to the terms of the transaction.

Airtel recently reported a consolidated net loss of Rs 5,237 crore for the quarter ended March 2020, against a net profit of Rs 107.2 crore in the year-ago period. The company undertook a CapEx investment of Rs 25,359 crore on a consolidated basis during the year. Airtel’s consolidated net debt excluding lease obligations stood at Rs 88,251 crore in the quarter ended March. Including lease obligations, debt is pegged at Rs 1,18,235 crore.

In the financial year ended March 31, the company reported a net loss of Rs. 32,183 crore as compared with Rs 409 crore in the last financial year. However, revenues during the year grew by 8.4 per cent at Rs 87,539 as compared with Rs 80,780 crore last year.

—CT Bureau