Leading telecom operator Bharti Airtel on Wednesday announced a $3-billion fund raising, including through qualified institutional placement (QIPs), mainly to pay dues linked to the adjusted gross revenue (AGR) as directed by the Supreme Court (SC) recently.
The company board has given its approval to raise up to $2 billion through one or more QIP, public or private offerings of equity shares and compulsory convertible debentures etc. The board has also okayed raising $1 billion through foreign debt instruments and another $1 billion via “issuance of unsecured and/or secured, listed and/or unlisted, redeemable non-convertible debentures (NCDs) along with warrants or other similar security denominated in Indian national rupee or combination thereof in one or more tranches”, according to a regulatory filing.
The company has clarified that apart from $2 billion through QIP, the overall issuance (through a combination of foreign debt instruments and redeemable NCDs and warrants etc) for now shall be up to $1 billion, making it a total of $3-billion fund raising. The telco’s fund raising plans come at a time when it is staring at a substantial pay out of around Rs 43,000 crore to the Centre towards AGR dues. Airtel had reported a net loss of Rs 23,044 crore for the quarter ended September 30, on the back of an AGR provision of Rs 28,450 crore.
In the AGR provision, the company kept aside Rs 28,450 crore as a charge for the quarter (principal Rs 6,164 crore, interest Rs 12,219 crore, penalty Rs 3,760 crore and interest on penalty Rs 6,307 crore) with respect to the licence fee as estimated base. To fight the financial stress, the company on December 1 announced a tariff hike of up to 40 per cent for its prepaid customers.
The SC, on October 24, had allowed the central government to recover Rs 92,641 crore in total AGR from telecom operators including Bharti Airtel, Vodafone Idea and Reliance Jio. The total AGR demand (including penalties and interest) from telcos adds up to an estimated Rs 1.4 trillion. he apex court, which upheld the government definition of AGR, ordered the telecom companies to pay up the past statutory dues within three months or by end of January, 2020. The companies are seeking waiver of interest and penalties on the dues. They have also made an appeal for staggered payments instead of three months mandated by the SC. While the government hasn’t offered any relief on penalties, interests or mode of payment, the Union Cabinet on November 20 had announced a Rs 42,000-crore package in terms of a two-year moratoriumon spectrum payments to debt-laden telecom companies.