AIRTEL RAISES $3 BN TO HELP MEET DUES
NEW DELHI: Bharti Airtel Ltd has raised $3 billion through a qualified institutional placement (QIP) and an overseas bond to repay government dues.
The telco raised $2 billion through a QIP at ₹445 a share, it said in a release on Wednesday. An additional $1 billion was raised through an issue of foreign currency convertible bonds (FCCB). The bonds were issued at a coupon of 1.5% per annum and will mature in 2025. FCCBS are debt instruments denominated in a foreign currency, which can be converted into shares.
Bharti Airtel’s board had approved an initial conversion price of ₹534 per equity share for the bond issue.
With the completion of the latest fund-raising exercise, Airtel has raised a total of $11.1 billion in equity capital over the past five years.
The operator, hit by an apex court verdict mandating it to pay dues of ₹35,586 crore to the department of telecommunications (DOT) by January 24, will use a chunk of the proceeds from the QIP to meet this liability.
“The company proposes to utilize the net proceeds for any payment that may be required to be made arising out of the judgment of the Supreme Court delivered on October 24 in relation to a long outstanding industrywide case in respect of the definition of adjusted gross revenue (AGR),” Airtel said on 8 January. Post the QIP issue, Airtel’s promoter group holding will fall from 62.70% to 58.98%.
“The transaction is the largest dual tranche equity and FCCB offering ever in Asia-pacific, the largest QIP by a private sector issuer ever in India and the largest FCCB offering from an India issuer in the last 12 years,” it added.
The Supreme Court had upheld the government’s definition of AGR, which includes revenue from non-core telecom operations such as rent, dividend and interest income. Operators have to pay 8% of their AGR as licence fee.
The fundraise is also significant as Airtel needs to build a war chest to survive in the competitive domestic telecom sector.