SINGAPORE/BANGALORE: Singapore Telecommunications Ltd (Singtel) said it will buy roughly US$525 million (RM2.14 billion) worth of Bharti Airtel stock as part of the Indian telecoms operator’s plan to raise US$4.6 billion (RM18.8 billion) through shares and bonds.
Airtel hopes to use the money to cut debt and shore up its balance sheet at a time when the broader Indian telecom industry is grappling with a price war triggered by the entry of Reliance Jio Infocomm Ltd.
Under the fundraising plan, announced last month, Airtel plans to sell new shares worth 250 billion rupees (RM14.6 billion) for 220 rupees apiece, or a nearly 30% discount to its current stock price. It will raise another 70 billion rupees via foreign-currency bonds.
Airtel’s net debt stood at more than US$15 billion as of Dec 31, while its current market value is around US$17.5 billion. Singtel had a net debt S$9.75 billion (RM29.3 billion) at the time.
Singtel said it will buy 170 million new shares in Airtel, India’s No. 2 telco in terms of subscribers. This will dilute its effective interest in Airtel to 35.2% from 39.5%.
Airtel’s two other major shareholders – Bharti Group and Bharti Telecom – intend to subscribe to their full entitlement in the rights issue, while Singapore’s state-backed GIC will commit about 50 billion rupees, Airtel and Singtel said.
Source: The Sun Daily