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Bharti Airtel board approves fundraising of $3 billion via debt and equity

Airtel will launch one or more QIPs or OFS or a combination of similar offers to raise $2 billion.|
Updated: Dec 04, 2019, 05.29 PM IST
NEW DELHI: Faced with AGR dues worth Rs 43,000 crore to the government, the board of telecom giant Bharti Airtel on Wednesday approved a plan to raise $3 billion via various modes including Qualified Institution Placement (QIPs), stake sale and debt papers.

The company in an exchange filing said that it will launch one or more QIPs or offer for sale of equity shares or a combination of similar offers to raise $2 billion. Rest $1 billion will be raised through debentures and bonds.

Airtel board has authorised the Special Committee of Directors for taking necessary steps for implementing the fundraising plans.

The telecom major desperately needs cash to payoff its statutory dues apart from debts.

Airtel had reported a net loss of Rs 23,044 crore for the quarter ended September 30, on Rs 28,450 crore provisions towards adjusted gross revenue (AGR) dues.

The company had provided Rs 28,450 crore as a charge for the quarter (principal Rs 6,164 crore, interest Rs 12,219 crore, penalty Rs 3,760 crore and interest on penalty Rs 6,307 crore) with respect to the licence fee as estimated based on Supreme Court’s judgement and spectrum usage charges (SUC) as estimated based on the definition of AGR.

Amid tariff war with Reliance Jio, Airtel on Tuesday hiked prices of its prepaid plans by 10-40 per cent. The company said that it has increased tariff in the range of 50 paise per day to Rs 2.85. Airtel’s popular bundled plans offering unlimited calling and data that were earlier priced at Rs 249 (28 days validity) and Rs 448 (82 days validity) will now cost Rs 298 and Rs 598 (84 days validity), respectively.

The announcement of tariff hike came right after Vodafone Idea announced hiked tariffs of its prepaid on Sunday.

As per estimates by IIFL Securities, following the price hike, Airtel’s India mobile revenue for FY21 will rise to Rs 57,930.2 crore from Rs 47,384 crore as per an earlier estimate. The hike will cause consolidated Ebitda to increase by 32 per cent, which would bring down its debt-to-Ebitda to 2.7 times, said the brokerage.

Earlier in the day, shares of Bharti Airtel closed higher by 0.41 per cent at Rs 460.85 on BSE. The scrip has gained 22 per cent in the last one month.

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