Bharti Airtel issued shares worth up to $2 billion and opened the sale of $1 billion in bonds to non-domestic investors, as the company embarked on a massive fundraising effort to cover controversial fees demanded by India’s government.
Airtel, which also made a provision of $4 billion in its latest quarterly financial results related to the levy, held an EGM last week to approve the latest funding measures. These were launched on the Bombay Stock Exchange after the close of trading yesterday (8 January).
Cash raised will be partly used to settle a long-running legal battle on taxation and spectrum costs related to revenue definitions.
In October 2019, the country’s Supreme Court issued a judgement in favour of the Department of Telecommunications’ definition of adjusted gross revenue (AGR). The decision means revenue from non-telecoms activities must be included in gross figures, which has a knock-on effect on fees covering spectrum use and licences.
Operators have fought the case over a number of years and continue to dispute the decision, which leaves them facing huge financial liabilities due later this month.
The Economic Times estimated Airtel’s liabilities at INR350 billion ($4.9 billion). Rival Vodafone Idea set aside INR257 billion in its most recent financial statement to help cover its costs.
In November, Vodafone Group CEO Nick Read savaged the decision of Indian authorities on AGR and vowed not to pump any fresh funds into its Vodafone Idea joint venture.Subscribe to our daily newsletter Back