New Delhi: India’s No.2 telecom firm, Bharti Airtel Ltd, has formed a special committee to explore and evaluate fundraising options with an aim to strengthen the company’s capital structure and balance sheet as it battles Reliance Jio Infocomm Ltd in the telecom battleground. The committee will place its recommendations before the company’s board for final approval, Airtel said in a filing to the exchanges.
The company did not specify the potential amount it aims to raise.
Airtel is in the midst of a heated battle for market share with rivals Reliance Jio, the telecom subsidiary of the cash-rich Reliance Industries Ltd, and Vodafone Idea Ltd, which plans to raise as much as $2.5 billion through its promoters.
Reliance Jio’s strategy to garner subscribers through cheap data tariffs has made in imperative for rivals to pump in funds in the cash-guzzling telecom sector.
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In October, Bharti Airtel had said that half a dozen marquee investors, including Warburg Pincus Llc, Temasek Holdings, Singapore Telecommunications Ltd and SoftBank Group Corp, will invest a combined $1.25 billion in Airtel Africa ahead of a potential initial public offering (IPO) and the funds would be used to trim Airtel Africa Ltd’s debt of $5 billion and expand operations in that continent.
As part of its steps to cut debt and monetise assets, Airtel in August sold a 20% stake in its satellite television arm, Bharti Telemedia Ltd, to private equity firm Warburg Pincus for $350 million.
In February this year, Singapore Telecommunications Ltd (Singtel) said it would will indirectly raise its stake in Airtel by investing ₹ 2,649 crore in Bharti Telecom Ltd, the promoter company of Airtel, through a preferential allotment of shares.
The board on Thursday also approved transfer of up to 591.87 million equity shares or 32% of Bharti Infratel Ltd’s stake owned by Airtel to its wholly owned subsidiary Nettle Infrastructure Investments Ltd (Nettle) as it deems fit. This is part of the company’s overall strategy to monetize its stake in Bharti Infratel, which is also in the process of a merger with Indus Towers Ltd.
Airtel had in November last year offloaded 83 million shares of its subsidiary Bharti Infratel for ₹ 3,325 crore through secondary share sale in the stock market to use the proceeds from this sale to pare its debt. The sale was carried out by Airtel via Nettle Infrastructure Investments.
Prior to that, Airtel had sold 3.65% of its stake in Bharti Infratel in August last year to raise more than ₹ 2,570 crore and before that in March last year it sold 10.3% stake in the tower unit to a consortium of investors to raise ₹ 6,193.9 crore. At present, Bharti Airtel—along with its Nettle Infrastructure Investments—holds 53.51% stake in Bharti Infratel.
On Thursday, Bharti Airtel shares fell 1.89% to ₹ 316.15 apiece on the BSE while the benchmark Sensex ended the day 0.14% lower at 36,431.67 points.