BENGALURU (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.
($1 = 71.7700 Indian rupees)
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