NEW DELHI :
New Delhi: The board of Bharti Airtel Ltd, the country’s second largest telecom operator, on Thursday approved the raising of ₹32,000 crore through a rights issue to shareholders and by selling foreign currency denominated bonds to pare debt and expand its network.
Bharti Airtel plans to raise ₹25,000 crore by selling shares to existing shareholders. Each share of the company will be sold at a discounted price of ₹220 compared to Thursday’s closing price of ₹317.95 on the BSE. Shareholders will be eligible to buy 19 new shares for every 67 shares held.
The New Delhi-based telecom operator will also sell perpetual bonds worth ₹7,000 crore.
The fundraising was earlier recommended by the company’s ‘Committee of Directors for Fund Raising’. The board has also authorized the committee to prepare for the rights issue and bond sale immediately, and decide on the necessary terms and conditions.
At the end of the December quarter, Bharti Airtel had consolidated net debt of more than ₹1 trillion. A part of the funds raised will be used to retire debt. The rest will be used by Bharti Airtel to improve its 4G coverage across the country and take on rivals such as Reliance Jio Infomm Ltd.
The telecom sector has witnessed intense competition after the entry of Reliance Jio in 2016, which brought down tariffs to rock bottom and hit revenue streams of other operators. Bharti Airtel’s consolidated net profit plunged 72% to ₹86.2 crore in the December quarter from a year earlier.
Earlier this month, ratings agency Moody’s Investors Service downgraded the company’s credit rating to Baa3 on the back of continuous pressure on the profitability and with no chance of recovery in sight. The outlook was also revised to negative by the ratings agency.