In a bid to arrest its dwindling financial condition, the board of Bharti Airtel on Wednesday approved raising up to $3 billion or Rs 21,500 crore via debt and equity shares or convertible instruments.
Sunil Mittal led telco will raise $1 billion or Rs 7,200 crore via debt and $2 billion or Rs 14,300 crore via equity shares or convertible instruments.
Though the move will lead to equity dilution of 6%, it would have a positive influence on the telcos financial condition.
It may be recalled that Bharti Airtel and others were hit by heavy losses and large government dues after the Supreme Court verdict on Adjusted Gross Revenue (AGR).
The company has been asked to submit Rs 35,586 crore by the SC in three months in its October 24 verdict.
Bharti Airtel reported losses of Rs 23,045 crore in the second quarter and is burdened by a debt of Rs 1 lakh crore. I
t will hope to cut some part of it through the current financing.
The telco had provided Rs 16,815 crore towards licence fee dues which included a principal of Rs 3,207 crore, the interest of Rs 7,000 crore, a penalty of Rs 2,492 crore and interest on penalty of Rs 4,116 crore during the fiscal second quarter.
Airtel had also set aside Rs 11,635 crore on account of spectrum use charges — comprising principal of Rs 2,957 crore, the interest of Rs 5,219 crore, a penalty of Rs.1,268 crore and interest on penalty of Rs 2,191 crore.
However, brokerages estimate that the total amount owed by Bharti Airtel to the government is over Rs 34,000 crore.
Earlier this year, Bharti Airtel had raised around Rs 32,000 crore, of which Rs 25,000 crore came from a rights issue.
While the stocks of Bharti Airtel and Vodafone Idea came under pressure because of competition from Jio, which impacted their bottom lines.
Bharti Airtel, Vodafone Idea, Reliance Jio are also looking to strengthen their financials by raising tariffs.
The company raised tariffs from Monday after a period of three years, and the increment ranges between 10% and 45%.
Going ahead while the fresh equity and debt funding would give a short term respite long term challenges continue
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