Airtel looking to raise Rs 7,000 cr via bond issue

New Delhi: Bharti Airtel is looking to raise about Rs 7,000 crores ($1 billion) through a bond issue by its subsidiary Network i2i. The proceeds of the sale will be used to pare its debt. "…offering of USD denominated Guaranteed Subordinated Perpetual Securities by Network i2i Limited (a direct 100 per cent subsidiary of Bharti Airtel) expected to be rated BB by both S&P and Fitch may follow, subject to market conditions," Bharti Airtel said in a regulatory filing.

Airtel ropes in bankers

Bharti Airtel has roped in a bunch of bankers — BofA Merrill Lynch, Barclays, BNP Paribas, Citigroup, HSBC, JP Morgan and Standard Chartered Bank — as joint bookrunners and joint lead managers to organise a series of fixed income investor meetings and calls across Asia, Europe and the US starting Wednesday, the telecom service provider said.

According to sources, the company is planning to raise funds between $750 million to $1 billion, and the final figure will be arrived at based on the market response.

The backdrop

Airtel's debt was at Rs 1.16 lakh crore until June 2019. S&P Global Ratings said that it expects Airtel's leverage to remain elevated over the next six to nine months, but improve gradually due to reduced capital spending and increasing stability in its India mobile operations.

"We assess Network i2i Ltd's proposed $1 billion subordinated perpetual securities (PERPS) as having intermediate equity content. The PERPS are guaranteed by Bharti. We estimate the issuance will improve the India-based telecoms operator's FFO-to-debt ratio (funds from operations to debt ratio) by about 50 basis points," S&P Global Ratings said.