Bharti Telecom (BTL) is looking to raise up to Rs 1400 crore through corporate bonds in the local money markets for participating in Airtel’s rights issue. For the unaware, Bharti Telecom is a holding company of the telco’s promoters. Airtel had a few months back received approval from its board for going ahead with the rights issue of Rs 21,000 crore. To help keep the investors safe, the telco had promised that any unsubscribed part of the issue would be purchased by the promoters. Now, as per an ET Telecom report, the holding company of the promoters, Bharti Telecom (BTL), is looking to raise up to Rs 1400 crore. This will help the promoters in participating in the rights issue of Airtel as well as refinance some high-cost debt.
Both Bharti Enterprises, Singtel Can Use the Raised Money to Invest in the Rights Issue
According to the publication’s report, the bonds were up for bidding in the local markets, and Barclays was the only investor in those papers. The bonds released by Bharti Telecom have three sets of maturities — one year, two years, and three years. The interest rates offered by these bonds are 6.42%, 5.10%, and 5.85%, respectively.
The money raised through the bonds from Bharti Telecom can be utilised by both the Bharti Enterprises and Singtel for investing in the rights issue of Airtel. As per analysts, the two promoters, including the Mittal family and the Singtel group, will have to invest around Rs 5,067 crore and Rs 6,661 crore, respectively. Out of this amount, the promoters are only liable to pay 25% upfront, which equates to Rs 1,267 crore for the Mittal family and Rs 1,665 crore for Singtel.
The Mittal family and Singtel both own nearly 56% of Airtel, out of which the Mittal family owns 24.13% of the company while Singtel owns 31.72% of the company. Airtel's rights issue opened on October 5, 2021, and will close on October 21, 2021.