Bharti Airtel to raise up to $3 bn via bonds, shares
Photo Credit: Reuters

Indian telecom operator Bharti Airtel Ltd said on Wednesday it would raise up to $3 billion via debt and equity, as it looks for ways to pay down overdue fees it owes the government.

Last month, Airtel and industry peer Vodafone Idea Ltd warned that their ability to operate and make profits would depend on relief from the government, after the Indian Supreme Court upheld a demand by the telecoms department that wireless carriers pay overdue levies and interest.

Airtel said here it will raise $2 billion via qualified institutional placement and $1 billion via bonds and debentures.

As two of the country’s top three carriers, Vodafone Idea Ltd and Bharti Airtel will have to pay a bulk of the $13 billion owed. Both carriers have approached the court to review the October ruling.

Indian mobile carriers have until January to pay at least $13 billion in dues to the state following a court ruling in October. The sector got some respite when the government allowed mobile operators to defer upcoming spectrum payments for the next two financial years until March 2022.

Both carriers have since raised tariffs of some call and data services.

“For the time being, the fundraising will help Airtel tide over the liquidity requirement till March,” said Deepak Jasani, head of retail research at HDFC Securities.

“If there are no reductions in usage because of tariff hikes or downtrading, then revenues will see a substantial rise and that will help them sustain.”

Airtel reported a consolidated net loss of 230.45 billion rupees ($3.21 billion) for the September quarter after it made a provision for dues it owed to the government.

Airtel, which has 1.18 trillion rupees ($16.44 billion) in debt, is also under pressure to gain market share after the entry of Reliance Jio Infocomm Ltd, owned by India’s richest man Mukesh Ambani, triggered a price war in the sector.

Rival Vodafone Idea posted the biggest loss in Indian corporate history on the back of these challenges.

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