Bharti Airtel Considers a $1 Billion Capital Raising to Cover Spectrum Dues: Report

Later this month, Bharti Airtel is set to meet with prominent global banks such as Barclays and Citi to discuss the preferred manner of financing and pricing. 

Sunil Bharti Mittal’s Bharti Airtel is apparently looking at raising $1 billion (about Rs 8,330 crore) to cover the majority of its remaining dues related to the spectrum purchased in 2015. This fund-raising effort might also include the issuance of bonds. 

According to The Economic Times, the telecom behemoth will meet with key global banks including Barclays and Citi later this month to discuss the preferred manner of funding and pricing. 

In 2015, the corporation must settle Rs 12,000 crore in deferred obligations related to the spectrum purchase. According to top bankers familiar with the situation, the business has been enquiring about the most cost-effective approach to raise cash and whether to use bonds.

According to the article, the refinancing will help Bharti Airtel save on yearly interest expenses, strengthen its balance sheet, and enhance cash flows as it expands its 5G coverage. 

Airtel may also contemplate using part of its outstanding rights issue earnings to prepay some of the 2015 spectrum auction fees. Two years ago, the telecom collected Rs 5,247 crore in the first tranche of a Rs 21,000 crore rights offering. 

The telecom firm paid Rs 29,130.2 crore for 111.6 MHz of spectrum. The initial payment of Rs 7,832.6 crore was followed by two more payments of Rs 8,815 crore in March 2022 and Rs 8,025 crore in July 2023. 

Meanwhile, Bharti Airtel recorded a 37% drop in net profit (attributable to owners) to Rs 1,341 crore for the quarter ended September 30, 2023, owing to a one-time charge of Rs 1,570 crore in October. In the previous fiscal year, it reported a combined net profit of Rs 2,145 crore. Revenue increased 7% to Rs 37,044 crore in Q2FY24 from Rs 34,527 crore in Q2FY23.

On November 17, the business announced in another filing that its board of directors had approved the allocation of 14.16 lakh fully paid-up equity shares to certain Foreign Currency Convertible Bond (FCCB) holders at a conversion price of Rs 518 per equity share. According to the notification, this occurred after the FCCB holders received notice of conversion of FCCBs with a principal value of $10,188,000.