Singapore duo to invest in Bharti Airtel rights offer

This comes as Bharti Telecom Ltd will renounce 227,272,727 shares out of its rights entitlement in favour of GIC

  • Published 8.03.19, 12:26 AM
  • Updated 8.03.19, 12:26 AM
  • a min read
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Apart from the rights issue, Bharti Airtel will mobilise Rs 7,000 crore through foreign currency perpetual bond. The company is now in the process of appointing investment banks. (Shutterstock)

Bharti Airtel has received commitment from Singtel and GIC of Singapore to subscribe to its Rs 25,000- crore rights issue, which is part of its Rs 32,000-crore capital raising programme to curtail debt. The rights issue will also see the participation of the other promoters.

Singtel, part of the promoter group and the single largest shareholder of Bharti Airtel, will infuse Rs 3,750 crore in the proposed issue, while GIC will invest Rs 5,000 crore. A statement from the company said the entire rights entitlement of the promoter and promoter group of around Rs 16,785.7 crore will be subscribed by the promoter and promoter group and GIC.

The promoter and promoter group will subscribe to Rs 11,785.7 crore and GIC on behalf of Government of Singapore and Monetary Authority of Singapore will chip in Rs 5,000 crore.

This comes as Bharti Telecom Limited, the other key shareholder, will renounce 227,272,727 shares out of its rights entitlement in favour of GIC.

The rights issue will be made at a price of Rs 220 per share and comes at a ratio of 19 shares for every 67 shares held. Out of the issue proceeds, close to Rs 21,550 crore will be used to repay borrowings.

Singtel said in a statement that it will subscribe to 17 crore shares, which represents its rights entitlement for its direct stake of 15 per cent held in Airtel.

It also owns an indirect stake in the company through Bharti Telecom Limited.

The company added with GIC’s entry and upon closing of the rights issue, its effective interest in Airtel will be 35.2 per cent and will continue to be the single largest shareholder.

Apart from the rights issue, Bharti Airtel will mobilise Rs 7,000 crore through foreign currency perpetual bond. The company is now in the process of appointing investment banks.

Bharti Airtel will use the proceeds from the issue to reduce leverage and strengthen its balance sheet as it continues to invest in networks and spectrum in a highly competitive home market.

The shares of Bharti Airtel on Friday ended with a marginal loss of 60 paise to end at Rs 308.75 on the BSE.