GIC, others to invest in Airtel rights issue
FUNDS INFUSION Promoters to chip in with ₹11,785.7 cr
NEW DELHI: Promoters of Bharti Airtel along with Singapore government’s investment arm GIC Pvt. Ltd will subscribe to over half of the proposed ₹32,000 crore capital raising issue in a bid to infuse funds in the company.
“The entire rights entitlement of promoter and promoter group of approximately ₹16,785.7 crore will be subscribed by them and GIC,” Bharti Airtel said in a statement Thursday. The statement added that the promoter and promoter group will subscribe to ₹11,785.7 crore and GIC will subscribe to ₹5,000 crore by way of renouncement in their favour.
One of the promoters Singapore Telecommunications Ltd (Singtel) said it will infuse ₹3,750 crore in Bharti Airtel by subscribing to the proposed ₹25,000 crore rights issue of the company.
Singtel announced that “it will subscribe to 170 million new shares in the ₹25,000 crore rights issue by regional associate Bharti Airtel (Airtel) at an issue price of ₹220 per share, for a total consideration of ₹37,500 crore (about $525 million), representing the rights entitlement for its direct stake of 15%”.
With this rights issue subscription, Singtel’s effective interest in Airtel will be 35.2% and the company will continue to be the single largest shareholder in Airtel.
The board of Bharti Airtel approved the rights issue to raise up to ₹25,000 crore through the issuance of fully paid up shares at a price of ₹220 per share and to raise an additional ₹7,000 crore via the foreign currency perpetual bond issue.
GIC has confirmed to subscribe to this renounced entitlement on behalf of government of Singapore and Monetary Authority of Singapore.
“The promoter and promoter group also reserves the right to subscribe either itself or through investors for additional shares in the issue, including in the event of under-subscription by public,” the statement said.
Airtel is in the process of appointing banks to execute this.
“The rights issue reiterates the confidence of our shareholders in the competitive strength and sound business strategy of Airtel. It shall further strengthen our balance sheet with desired financial flexibility so as to meet future opportunities, particularly in the rapidly transforming Indian mobile market,” Gopal Vittal, managing director and chief exectutive officer (India and South Asia) Bharti Airtel said. He said, the fresh capital infusion will help the company to continue investments in future rollouts to build large network capacity and create content and technology partnerships to ensure the best customer experience.
SINGTEL WILL INFUSE ₹3,750 CR IN BHARTI AIRTEL BY SUBSCRIBING TO THE PROPOSED ₹25,000 CR RIGHTS ISSUE