Bharti to list $100m FCCBs in Singapore

Bharti Tele-Ventures has decided to list its foreign currency convertible bonds (FCCB) worth $100 million at the Singapore Stock Exchange.

The proposal has been approved by the foreign investment promotion board (FIPB) subject to the condition that the move did not breach the sectoral cap of 49 per cent.

Industry sources said that the bonds, which carry zero coupon, are for a term of five years and shall be due for redemption in 2009.

The bonds are convertible into equity shares of the company constituting around 1.15 per cent of the paid up and issued share capital of the company, post conversion of the bonds.

The conversion price has been pegged at Rs 233.17 which is at a premium of 40 per cent of the closing price of Bharti's share price in April. The company also have the option to subscribe for additional FCCB for up to $15 million.

The aggregate foreign shareholding in Bharti stands at 47.7 per cent which gives it enough head room for issuing the FCCB. The department of telecom has also approved the proposal.

In its proposal to the FIPB, Bharti had stated that in order to ensure that at all times there is sufficient headroom in the company's share capital for conversion of bonds, it is the envisaged that a headroom of 0.60 per cent be reserved for the equity shares to be issued to the holders of bonds.

According to industry sources, Bharti has stated that as and when the FCCBs are converted into shares by any holder, the company would approach FIPB to seek approval.

The Reserve Bank of India has already been requested to freeze the purchase of Bharti's shares in the secondary market on the foreign component of the paid up capital in order to keep within the FDI limit of 49 per cent.