Indian operators plan new debt repayment strategies

Indian operators plan new debt repayment strategies

Indian operators Bharti Airtel and Vodafone Idea are both said to be putting forward new fundraising plans to cope with the need to pay dues arising out of a recent Supreme Court ruling.

Bharti Airtel has announced that it aims to seek approval from shareholders for plans to raise $2 billion in equity and another $1 billion in debt to help it pay the statutory dues.

Indian press reports indicate that the plans to raise the $2 billion – through qualified institutional placement, public issue, preferential shares or private placement – will be put forward for approval at an Extraordinary General Meeting in early January. The company has said that the remaining $1billion could be raised through foreign currency convertible bonds or debentures.

Last week, the company announced that its board had approved the raising of $4 billion through equity dilution and debt funding.

Meanwhile Vodafone Idea is reportedly planning to raise some $2.5 billion through the sale of its optic fibre business. Indian press reports say that the troubled operator is in talks with global asset manager Brookfield to sell its optic fibre assets, with the help of Bank of America and Morgan Stanley. Vodafone Idea shares rose on the news.

Vodafone Idea was the hardest hit of the Indian operators by the recent judgment; it’s looking at a payback of some $7.4 billion. Asset sales are not the only strategy it is employing. Along with Bharti Airtel and Reliance Jio it has raised tariff rates.  It is also lobbying government to reduce or even waive the sums owed, with vocal support from a number of industry bodies.

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