Airtel initiates plan to raise up to $1 bn; arm to issue bonds

Bharti Airtel has initiated a massive fundraising exercise, estimated at up to $1 billion (about ~7,000 crore) via a bond issue by its subsidiary Network i2i, the proceeds of which will be used to cut debt for the telco that is engaged in a turf war in the Indian telecom market.

The mega fundraiser comes just months after the Sunil Mittal-led company raised ~25,000 crore through a rights issue. The telecom sector has been battered by falling tariffs, eroding profitability, and mounting debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by Mukesh Ambani.

But with the market for voice and data growing at an explosive pace and intensifying competition, telecom operators have been investing in strengthening networks, and preparing war chests to protect their turfs.

In a regulatory filing on Tuesday, Airtel announced that an “...offering of $ denominated Guaranteed Subordinated Perpetual Securities by Network i2i Limited (a direct 100 per cent subsidiary of

Bharti Airtel) expected to be rated ‘BB’ by both S&P and Fitch may follow, subject to market conditions.” Airtel has appointed a clutch of bankers, including Bofa Merrill Lynch, Barclays, BNP Paribas, Citigroup, HSBC, J P Morgan and Standard Chartered Bank as joint bookrunners and joint lead managers to organise a series of fixed income investor meetings and calls across Asia, Europe and the US starting Wednesday, it added.