Airtel repays Rs 15,519 crore to clear pending deferred liabilities

Bharti Airtel on Friday announced that it has pre-paid Rs 15,519 crore to clear all deferred liabilities for spectrum acquired in 2014.

The telecom operator said that it has paid Rs 15,519 crore to the Department of Telecom (Government of India) towards prepayment of the entire deferred liabilities pertaining to spectrum acquired in auction of year 2014. The company had acquired 128.4 MHz spectrum (including Telenor spectrum) for a consideration of Rs 19,051 crore in the 2014 auction.

The liabilities were due in annual instalments from FY 2026-2027 to 2031-2032 and carried an interest rate of 10% (the highest rate amongst the deferred liabilities and borrowings) and an average residual life of seven plus years.

The company estimates that the prepayment will likely result in interest cost savings of at least Rs 3,400 crore over the residual life for fully substituted capital. The telecom company posted a 4.6% rise in interest cost to Rs 3,964 crore in Q2 FY22 over Q2 FY21. For the year financial year ended 2021, Airtel posted interest cost of Rs 15,091 crore, 7.2% higher than Rs 14,073 crore posted in financial year ended 2020.

Bharti Airtel posted a consolidated net profit of Rs 1,134 crore in Q2 FY22 as against a consolidated net loss of Rs 763.2 crore registered in Q2 FY21. The telecom operator posted quarterly revenues of Rs 28,326 crore, rising 13% YoY on a reported basis.

Shares of Bharti Airtel were trading 1.53% lower at Rs 671.75 on BSE.

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