Bharti completes 5% equity allotment to Qatar Foundation Endowment

The company ha a debt of around Rs 65,000 cr, company claimed investment would strengthen capital structure, growth

Bharti Airtel today said it has completed allotment of 5% equity, or 199.9 million new shares at Rs 340 each, to Qatar Foundation Endowment, on preferential basis for Rs 6,796 crore.

Bharti Airtel has debt of around Rs 65,000 crore. The company claimed the investment would strengthen its capital structure and give it flexibility to deliver on its growth strategy. Last month, announcing results for fiscal year 2012-13, Bharti Airtel had said it would spend $2.2-2.3 billion (Rs 12,710-13,288 crore) in capital expenditure for the full year. Of this, capex in Africa is expected to be $600 million.

QFE is an investment vehicle of the Qatar Foundation, controlled by Sheikha Mozah, the second wife of the country's emir.

Commenting on the completion of the agreement, Sunil Bharti Mittal, chairman, Bharti Airtel, said, “This is a landmark transaction for India and its telecom sector and a vote of confidence from one of the most respected investors in the world. We look forward to a long and fruitful partnership with Qatar Foundation Endowment.”

Rashid Al-Naimi, acting chief executive officer, Qatar Foundation Endowment, said: “We are delighted that our investment received overwhelming support from Bharti Airtel's existing shareholders, and look forward to supporting the long term strategic growth of the Company.”

With the allotment of these new shares, the paid up share capital of Bharti Airtel increased to Rs 1,998 crore consisting of 3,997,400,102 equity shares of Rs 5 each.

On May 3, 2013, Bharti Airtel and Qatar Foundation Endowment had announced a binding agreement for the deal. As part of the investment, Qatar Foundation Endowment would have one seat on the Board of Bharti Airtel.

Bharti Airtel has recently raised about $1.5 billion via issue of dollar bonds through its Netherlands-based subsidiary. It is raising around $500 million through a second tranche of bonds, and has received bids worth four times the value on offer.