Also, the company's board has approved issuance of foreign currency bonds up to a limit of $1 billion or equivalent in one or more tranches, Airtel said in a stock filing. The development assumes importance in the wake of intense competition in the telecom sector triggered by the entry of a new player Reliance Jio. Bharti Airtel had recently increased its capital expenditure guidance for this fiscal to Rs 25,000 crore from Rs 20,000 crore earlier.
Airtel will now approach shareholders for final approval of the propose raising of debt. "Nothing changes. Also, interest rates are rising overall; so, maybe they want to raise funds right now before cost of borrowing goes up further", this analyst said on the condition of anonymity.
Airtel's consolidated net debt stood at Rs 91,714 crore as of December 31, 2017 and its quarterly net profit has gone down in the on-going tariff war.
Back in December past year, the Bharti group had announced plans to sell a fifth of its DTH arm to an affiliate of global private equity firm Warburg Pincus, for around Rs 2,258 crore ($350 million), with most of the funds being consumed by Bharti Airtel to fight mounting competition from Reliance Jio.
"Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the Board in its meeting held on March 12, 2018, has approved the transfer of 19 per cent equity shares of Bharti Telemedia Limited ('Telemedia'), a subsidiary Company to Nettle Infrastructure Investments Limited, a wholly owned subsidiary company", the release to the BSE stated. The money will be used to reduce debt.
Earlier, Airtel had pared stake in tower arm Bharti Infratel. Following this equity infusion by Idea's promoters, their stake in India's third largest telecom operator will rise to 47.2% from 42.4% now.
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