Bharti Airtel, GIC to subscribe half of Rs32, 000 cr rights issue

The board of directors of telecom major Bharti Airtel proposes to raise up to Rs32,000 crore, through a rights issue of fully paid-up preference shares worth Rs25,000 crore at Rs220 per share and an additional Rs7,000 crore through issue of Foreign Currency Perpetual Bonds.

Promoters of Bharti Airtel along with Singapore government's investment arm GIC Private Ltd will subscribe to over half of the proposed Rs32,000 crore rights issue in a bid to infuse funds in the company, which is saddled with losses.
Bharti Airtel proposed to issue up to 1,133,591,075 rights equity shares of face value of Rs5 each at a price of Rs220 per share, at a premium of Rs215 per rights issue aggregating to Rs24,939 crore  to eligible shareholders of the company in the ratio of 19 rights equity shares for every 67 equity shares held by the eligible equity shareholders of the company as on record date, the company stated in a draft letter of offer to shareholders.
"The entire rights entitlement of promoter and promoter group of approximately Rs167,857 million (Rs16,785.7 crore) will be subscribed by them and GIC," Bharti Airtel said in a statement on Thursday.
Further, the company said the promoter and promoter group will subscribe to Rs11,785.7 crore and GIC will subscribe to Rs5,000 crore by way of renouncement in their favour.
Singapore Telecommunications Ltd (Singtel) said it will infuse Rs3,750 crore in Bharti Airtel by subscribing to the proposed Rs25,000 crore rights issue.
Singtel announced that "it will subscribe to 170 million new shares at an issue price of Rs220 per share, for a total consideration of Rs3750 crore, representing the rights entitlement for its direct stake of 15 per cent.
With this rights issue subscription, Singtel's effective interest in Airtel will be 35.2 per cent and the company will continue to be the single largest shareholder in Airtel.
“The rights issue reiterates the confidence of our shareholders in the competitive strength and sound business strategy of Airtel. It shall further strengthen our balance sheet with desired financial flexibility so as to meet future opportunities, particularly in the rapidly transforming Indian mobile market,” Gopal Vittal, MD and CEO (India & South Asia) at Bharti Airtel, said.
“With a solid spectrum pool, and robust networks investment over the last three years, Airtel is well positioned to strengthen and participate decisively in the 4G data market. The fresh capital infusion will help us to continue our investments in future rollouts to build large network capacity and create content and technology partnerships to ensure the best customer experience,” he added.
He said the fresh capital infusion will help the company to continue investments in future rollouts to build large network capacity and create content and technology partnerships to ensure the best customer experience.