Saddled with huge debt and spectrum dues, Sunil Mittal-owned Bharti Airtel plans to raise about Rs 16,500 crore via bonds for refinancing its over Rs 90,000-crore debt and paying the government for radiowaves.
The board of Airtel on Monday approved the plan for raising Rs 16,500 crore via private placement of non-convertible debentures (NCDs) and foreign currency bonds.
Airtel's consolidated net debt as on 31 December 2017 stood at Rs 91,714 crore, up from Rs 91,480 crore in the previous quarter.
“Any funds, if raised from the issuance of aforesaid debt securities, shall be used for routine treasury activities, including refinancing of existing debt and spectrum liabilities,” the company said.
In 2016, Bharti Airtel acquired 173.8 Mhz spectrum across 1800/2100/2300 MHz bands for Rs 14,244 crore in the government auction. In a BSE filing, Airtel said its board has approved the issuance of NCDs of up to Rs 10,000 crore on a private placement basis and the issuance of foreign currency bonds up to a limit of $1 billion (Rs 6,482 crore) or equivalent in one or more tranches.
The fund-raising plan is subject to shareholder and other requisite approvals. Further, the company said that an earlier approval received from the shareholders is valid for a period of one year, up to March 13, 2018, and the company intends to obtain a fresh approval from shareholders.
Airtel has been raising funds by progressively reducing its stake in its listed tower unit, Bharti Infratel to cut debt and to match competition with Jio in the 4G segment. It has raised nearly Rs 12,089 crore through multiple tiny stake dilutions in its tower arm.
Airtel recently said it may sell a much larger stake in Bharti Infratel to fund its plans, including bolstering of its 4G network. Airtel and its its wholly-owned subsidiaries own 53.51 per cent in the tower arm.
Bharti Airtel has already upped its capex guidance for fiscal 2018 to Rs 25,000 crore from Rs 20,000 crore earlier.
Last week, Bharti Airtel had announced plans to raise up to Rs 3,000 crore through non-convertible debentures for routine treasury activities such as meeting spectrum liabilities and refinancing debt. The company is set to acquire the India leg of the Gulf Bridge International (GBI) India–Middle East–Europe submarine cable.
Shares of Airtel vaulted 5 per cent after the company received approval from the board. The stock jumped 4.68 per cent to end at Rs 420.75 on the BSE. During the day, it soared 5.68 per cent to Rs 424.80. The stock was the biggest gainer on the Sensex.