Analysts said the Bharti Group has to raise debt to fund the Singtel stake purchase as the southeast Asian carrier recently ruled out any fresh equity infusion in Bharti Telecom.
Bharti Telecom (BTL), a key promoter company of Bharti Airtel, plans to raise up to Rs 6,000 crore of debt via non-convertible debentures (NCDs) to buy the balance portion of the 3.33 percent stake that Singapore Telecommunications (Singtel) will sell in the telecom firm.
The proposed rupee-linked NCDs are likely to be subscribed primarily by top foreign portfolio investors (FPIs), as per the report.
Last week, Singtel sold 1. 76 percent in Airtel through block deals for a little over Rs 7,100 crore. The bulk of that stake — around 1. 62 percent — was acquired by Bharti Telecom for Rs 6,604 crore, while the balance 0.14 percent was acquired by public shareholders in Airtel.
Bharti Telecom is now raising fresh debt to part-finance the remaining 1. 57 percent stake buy from Singtel, according to the report. BNP Paribas, HSBC, Japan’s MUFG and Standard Chartered Bank among others are likely helping Bharti Telecom to raise the money via rupee-linked NCDs.
The NCDs are expected to be of shorter duration between one- and three-year maturities. Analysts said the Bharti Group has to raise debt to fund the Singtel stake purchase as the southeast Asian carrier recently ruled out any fresh equity infusion in Bharti Telecom.
Singtel at present holds a 50.56 percent stake in Bharti Telecom and the Mittal family holds 49.44 percent. Bharti Telecom at present holds a 35.85 percent stake in the country’s second-largest telecom service provider – Bharti Airtel.
