Bharti Airtel Considers USD 1 Billion Fundraising Option For Spectrum Dues

Sunil Bharti Mittal-led Bharti Airtel is reportedly looking to raise around USD 1 billion (around Rs 8,330 crore) to to pay a major portion of its remaining dues related to the spectrum purchased in 2015. The fundraising may include a potential bonds issue.  

According to a media reports, the telco giant is expected to engage with top global banks like Barclays and Citi later to have talks on preferred mode of fundraising and pricing. 

The company needs to clear Rs 12,000 crore of deferred liabilities in relation to the spectrum purchase in 2015. 

The refinancing would allow Bharti Airtel to save on annual interest costs, strengthen its balance sheet and boost cash flows as it continues to extend its 5G coverage.

Additionally, the company might consider the option to access a portion of its remaining rights issue proceeds to prepay some of the 2015 spectrum auction dues. It had raised Rs 5,247 crore in the first tranche of the Rs 21,000 crore rights issue two years ago. 

Bharti Airtel had purchased 111.6 MHz of spectrum for Rs 29,130.2 crore. Out of which, Rs 7,832.6 crore was paid upfront and the rest was paid in two more tranches- Rs 8,815 crore in March 2022 and Rs 8,025 crore in July 2023. 

In October, the company reported a 37 per cent decline in net profit (attributable to owners) at Rs 1,341 crore for the quarter ending September 30, 2023 due to a one-time charge of Rs 1,570 crore. It reported consolidated net profit of Rs 2,145 crore in the year-ago period.

The firm's revenue rose 7 per cent to Rs 37,044 crore in Q2FY24 as against Rs 34,527 crore in Q2FY23.