Airtel On A Verge To Sell Bonds To Raise Rs 3,000 Crore
Shareholders of Bharti Airtel have allowed the company to raise Rs 3,000 crore by selling bonds through a private placement. It is a part of a total debt of Rs 16,500 Crore, which it will use to refinance the loan and make payments for spectrum.
Airtel said in a regulatory filing on Wednesday that the company has planned to issue 30,000 listed, unsecured, rated and redeemable non-convertible debentures with a face value of Rs 10 Lakh. He said that the amount received will be used in normal business operations. It includes routine treasury activities related to refinancing and debt related to spectrum and others.
According to Bharti Airtel’s website, the company has so far raised over $ 6.2 Billion in US Dollar, Euro, and Swiss franc by selling many long-dated bonds. The maturity of these bonds of the company is 5 to 10 Years.
Recent fundraising exercises will help the country’s largest telecom company to improve its balance sheet, which is getting tough competition from Reliance Jio Infocom. It has been reported that Airtel prefers to raise funds through debt securities.
It is also difficult for the company to raise loans from the bank as the Reserve Bank had warned the lenders of huge debt of about Rs 8 lakh crore in the Indian telecom industry. Apart from this, due to stringent competition, pressures on the profit margins of telecom companies are under pressure, and many small companies have involved in the business.
Airtel recently said that it will reduce its stake in Bharti Infratel. Airtel has 53.51% stake in the company. Singtel, which is Airtel’s major stakeholders, recently, invested Rs 2,649 Crore in the company. Telecom Company had planned to spend Rs 25,000 Crore in the current fiscal year to expand the 4G network.