Airtel fundraising plan gets strong response; MTNL approves monetisation move

10 Jan 2020

Bharti Airtel’s fundraising drive has garnered pledges of between USD9 billion and USD10 billion, the Economic Times reports, citing people with knowledge of the matter. The Indian telecom group had sought to raise around USD3 billion to help cover dues of more than INR280 billion (USD3.9 billion) relating to the Supreme Court’s October 2019 decision on Adjusted Gross Revenue (AGR). Airtel aims to raise the funds through the private placement of equity shares – in the form of a USD2 billion qualified institutional placement (QIP) – and a USD1 billion offering of foreign currency convertible bonds (FCCBs). According to the sources, Airtel ‘has already received subscriptions aggregating USD5.5 billion-USD6 billion for the QIP and over USD3 billion for the FCCBs.’ Alongside the AGR payment, Airtel is planning to use funds raised to improve its balance sheet by servicing or repaying debt and for CAPEX.

In a related development, shareholders in state-backed provider Mahanagar Telephone Nigam Limited (MTNL) have approved the raising of INR65 billion through the issuance of non-convertible debentures. Shareholders also approved plans to monetise the company’s land and building assets. Both measures are part of long-term efforts to rescue the loss-making firm and return the operator to profitability within the next financial year.

India, Bharti Airtel, Mahanagar Telephone Nigam Limited (MTNL)