Airtel is among the few domestic companies, including Reliance and SBI, to issue perpetual bonds that do not prescribe a maturity date but can go up to 100 years.
Bharti Airtel on Thursday said its wholly-owned subsidiary Network i2i has raised USD 250 million (approximately Rs 1,780 crore) through perpetual bonds offering an yield of 5.65 per cent. Airtel is among the few domestic companies, including Reliance and SBI, to issue perpetual bonds that do not prescribe a maturity date but can go up to 100 years. The latest fund-raise is in addition to existing securities of USD 750 million (around Rs 5,343 crore) that the company garnered recently. “Network i2i Limited…has successfully priced the additional issuance of USD 250,000,000 5.65 per cent,” Bharti Airtel said in a regulatory filing.
Network i2i Ltd, a Mauritius-based wholly-owned subsidiary of the company, through joint book-runners and joint lead managers has approached investors for the proposed additional issuance, the company said in a regulatory filing. The company had earlier said that the proceeds from the issue will be utilised for pruning debt of Bharti Airtel. Fitch Ratings has said Bharti Airtel’s proposed tap issuance of perpetual notes issued via its wholly-owned subsidiary, Network i2i Limited, will not affect the ”BB’/RWN’ rating on the notes.
“The proposed tap on the perpetual notes will share the same terms and conditions and constitute a single class of debt securities with the perpetual notes issued in October 2019 for all purposes under the trust deed,” Fitch Ratings said in a statement.
The proposed tap on the perpetual notes will benefit from a subordinated guarantee from Bharti, it added. It is pertinent to mention that the Supreme Court, in October last year, had upheld the government’s position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer. Bharti Airtel’s liabilities added up to nearly Rs 35,586 crore, including licence fee and spectrum usage charge dues.
In all, as many as 15 entities owe the government Rs 1.47 lakh crore — Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. Vodafone Idea, which is staring at unpaid statutory dues of Rs 53,038 crore, including Rs 24,729 crore of spectrum dues and Rs 28,309 crore in licence fee, has already warned of shutdown if no relief is given.
Most of the remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies. Bharti Airtel, Vodafone Idea, and Tata Teleservices have meanwhile jointly filed a modification application in the Supreme Court seeking more time to pay statutory dues. The plea came after SC dismissed review petition of telecom companies on AGR dues.