The company needs to pay Rs 35,585 crore as AGR dues by Jan 23
A week before the deadline to pay Rs 35,000 crore adjusted gross revenue (AGR) dues to the government, Bharti Airtel has raised $3 billion through qualified institutional placement and foreign currency convertible bonds. The company said in a statement on Wednesday that it raised $2 billion through QIP and $1 billion through FCCBs.
Bharti Airtel and other telecom operators like Vodafone Idea together need to pay Rs 1.47 lakh crore as AGR dues by January 23 as a fallout of a Supreme Court’s October 24, 2019 order on computation of AGR. The company has filed a limited review petition seeking waiver of interest, penalty and interest on penalty comprising 75% of the due amount, which will be taken up by the SC on Thursday.
After the $2 billion QIP, the holding of promoter and promoter group will come down to 58.98% as against 62.70%, the company said in a statement.
“The company… will issue 32,35,95,505 equity shares of face value of Rs 5 per equity share at a price of Rs 445 which implies a discount of 1.57% on the Sebi (Securities and Exchange Board of India) determined floor price of Rs 452.09 per equity share,” the statement said.
The offer saw participation by marquee global and Indian investors, it added. The transaction is the largest ever dual tranche equity and FCCB offering in Asia Pacific, largest QIP ever by a private sector issuer in India, and largest FCCB offering from an India issuer in the last 12 years, the company added.
The participation was by diversified investor base, which includes global long only funds, sovereign wealth funds, domestic mutual funds, multi-strategy funds and insurance companies in sizeable quantities, it added.
Long only investors comprised 80% of the demand for the QIP.
The company said the FCCB offering was oversubscribed multiple times with very strong demand from Asian and European funds.
“The FCCB was priced at a coupon of 1.5% per annum, yield-to-maturity of 2% per annum and a conversion premium of 20% above the final QIP price of Rs 445,” it said.
The statutory liability in the case of Bharti adds up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is spectrum usage charge. Of the total licence fee dues demand of Rs 21,682 crore, interest, penalty and interest on penalty comprise Rs 16,152 crore.
Harjeet Kohli, group director of Bharti Enterprises, said the offering witnessed a strong response from the global and domestic investor community, despite a volatile market environment and challenging global macro-economic conditions. “This underlines Airtel’s growth oriented financial performance and future growth potential of our business and the sector. We are delighted with the participation and continuing support of high quality investors thereby ensuring further diversification of the shareholder base of Bharti Airtel.”
The company said that the proceeds of the fund will be used for augmenting the company’s long term resources and strengthening the balance sheet, servicing and repayment of short term and long term debts, towards statutory dues and long term working capital requirements.