Bharti Airtel to borrow over $2 billion amidst financial woes
21 November 2018
Loss-hit Bharti Airtel Ltd is raising more than $2 billion in medium-term loans from banks, as rising competition eats into the company’s revenue and profits at home and abroad.
Sunil Bharti Mittal, founder chairmen of Bharti Airtel, is reported to have agreed to take two and three-year from a syndicate of 10 to 12 lenders amidst looming threat of credit downgrade to junk.
Moody’s Investors Services had, on 8 November, put Bharti’s Baa3 rating on review, which is the lowest investment-grade evaluation, for downgrade, after the telco reported its lowest level of profitability and the highest level of debts to fund capital.
India’s second-biggest wireless carrier posted a 65.4 per cent fall in quarterly profit on Thursday, as it faces pricing pressure amid aggressive competition in the country's telecom sector.
India's telecom industry has been battered by a price war, sparked by the entry of billionaire Mukesh Amabani-owned Reliance Jio Infocomm Ltd.
Reliance Jio Infocomm continues to be India’s first wireless company providing free voice services from 2016, the price war has benefited Indian customers.
The financial troubles combined with the turmoil in emerging markets also forced Bharti to delay plans for an initial public offer of its Africa unit.
The all-in cost for Bharti’s dollar loan, which includes margin and upfront fees for the deals, is about 110-120 basis points over London interbank offered rate, according to people familiar with the deal.
Bharti Airtel International (Netherlands) BV, a company unit, signed for separate bilateral loans totaling over 1.75 billion euros ($2 billion) with more than 10 lenders, reports quoting people familiar with the matter said.