Bharti Airtel board approves mega Rs 16,500 crore fund-raise

The Bharti Airtel board on Monday approved plans to raise upto a whopping Rs 16,500 crore through a mix of privately placed non-convertible debentures (NCDs) and a foreign currency bonds float for conducting treasury operations, including refinancing of debt and spectrum liabilities.

“Subject to approval of shareholders and other requisite approvals, the board of directors in its meeting held today has approved the issuance of NCDs of upto Rs 10,000 crore on a private placement basis in such tranches/series and at such rates as may be approved from time to time on a cumulative basis along with all NCDs issued by the company, and the issuance of foreign currency bonds upto a limit of $1 billion (Rs 6,482 crore) or equivalent in one or more tranches,” Bharti Airtel said in a regulatory filing to the Bombay Stock Exchange Monday.

The company further, said “any funds raised from issuance of aforesaid debt securities shall be used for routine treasury activities, including refinancing of existing debt and spectrum liabilities”.

A company insider said this is the largest-ever fund-raising plan approved by the Bharti Airtel board in a single meeting. The fund raising exercise is likely to be conducted over a period of time.

Bharti Airtel said that “earlier shareholders’ approval obtained for issuance of NCDs upto Rs 10,000 crore is valid for a year till March 13, 2018,” which is why, the company intends to obtain a fresh shareholder approval.

Bharti Airtel shares were up nearly 4% at Rs 417.80 in afternoon trade on the Bombay Stock Exchange.

Sunil Mittal-led telco’s consolidated net debt stood at nearly Rs 91,714 crore in the fiscal third quarter ended December.

Bharti Airtel had in a regulatory filing last week had said its board would meet on March 12 to consider raising funds via debt instruments, including bonds.

Over the past one year, India’s largest phone company has been raising funds by progressively reducing its stake in its listed tower unit, Bharti Infratel, to cut debt and free up cash and gird up for competition with Jio in the 4G segment. It has raised nearly Rs 12,089 crore through multiple tiny stake dilutions in its tower arm.

Bharti Airtel recently said it may sell a much larger stake in Bharti Infratel to fund its plans, including bolstering of its 4G network. The telco and its wholly-owned subsidiaries own 53.51% in the tower arm.

Bharti Airtel has recently boosted its capex guidance for fiscal 2018 to Rs 25,000 crore from Rs 20,000 crore earlier.