Airtel’s board approves Rs 320 billion fundraising plan; promoter group and GIC to invest in operator’s rights issue

Bharti Airtel’s board has approved its plans to raise Rs 320 billion through equity and bond sales. Of this amount, Rs 250 billion will be raised via a rights issue and the remaining Rs 70 billion will be mobilised through foreign currency perpetual bonds. This fundraising plan comes at a time when the operator seeks to reduce its debt and financing costs in order to boost cash flows and meet its capital expenditure. The planned rights issue has been priced at Rs 220 per share. The company will issue 1.14 billion shares, increasing its equity base by over 22 per cent to 5.13 billion equity shares. The rights entitlement ratio has been pegged at 19 shares for every 67 held. A major chunk of the proceeds from the share issue will be used by the operator to repay debt and lower borrowing costs. Further, Airtel’s board has also approved perpetual bonds of up to $1 billion (Rs 70 billion) denominated in foreign currency, subject to price, market conditions, and other terms and conditions as acceptable, and with conditions allowing the full accounting equity credit, subject to all applicable laws, including those under external commercial borrowing regulations. Meanwhile, the promoter group of Bharti Airtel (including the Bharti Group and SingTel) and GIC Private Limited (the investment arm of the Singapore government) will be subscribing to shares worth Rs 117.85 billion and Rs 50 billion, respectively, in the operator’s rights issue worth Rs 250 billion.

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