It is learnt that Airtel will make an announcement regarding this on Tuesday. According to the details available with Business Standard, Bharti Telecom
will sell 150 million shares, equivalent to 2.75 per cent of its stake in Airtel, through an accelerated book-build offer. The floor price of each share has been fixed at Rs 558, a discount of 6 per cent over the last closing price of Rs 593.20 on May 22 on the NSE. Airtel’s rights issue was priced at Rs 220 per share.
declined to comment on the deal, which is being handled by J P Morgan India in the capacity of its sole lead banker.
Airtel’s rights issue, worth Rs 25,000 crore and to fund its 4G network expansion, came a year ago and today the promoters are estimated to make over Rs 5,000 crore from sales of these 150 million shares.
The stake sale
comes at a time when Airtel’s operations have improved, with reduction in debt. Airtel’s consolidated net debt, excluding lease obligations, stood at Rs 88,251 crore on March 31, down from Rs 1.082 trillion a year ago.
Last week, Bharti Telecom
raised about Rs 3,500 crore via commercial paper, which offered 6.16 per cent, on average, with a three-month maturity. Commercial paper is a short-term debt instrument with less than a year’s maturity. In January, Airtel allotted $2 billion worth of equity shares to institutional investors to pay the AGR (adjusted gross revenues) dues to the central government. The company will also raise an additional $1 billion as convertible bonds, due in 2025, according to the terms of the transaction.
Airtel’s promoters held 62.7 per cent in the company, but it fell by about four percentage points in the rights issue after Bharti Telecom, one of the promoter entities, renounced part of its shares in the rights subscription in favour of GIC of Singapore. With the latest stake sale, the promoters’ holding will fall from 58.98 per cent to 56.23 per cent.
Airtel recently reported a consolidated net loss of Rs 5,237 crore for the quarter ended March 2020, against a net profit of Rs 107.2 crore in the year-ago period.
This was mainly due to the company accounting for Rs 7,004 crore as reassessed regulatory costs pertaining to spectrum charges. Operational performance was good, and is expected to improve further, helped by tariff hikes and improving data traffic.