Telecom operator Bharti Airtel’s board on Sunday approved raising up to Rs 21,000 crore by way of rights issue, at a price of Rs 535 per share.
The fundraising plans come at a time rival Vodafone Idea Ltd has been struggling to raise funds to meet its debt obligations, including AGR dues.
The fundraising will help the company bolster its balance sheet to invest in building a fifth-generation, or 5G, telecom network, strengthen its existing network to compete with Reliance Jio and pay adjusted gross revenue-related (AGR) liabilities, among other dues.
What is Right issue?
A rights issue is an offer to existing shareholders to buy additional new shares in the company.
Details of shares
The rights entitlement ratio entails one equity share for every 14 equity shares held by eligible shareholders as on the record date.
The terms of payment of issue price, envisage 25 per cent on application and balance in two more additional calls as may be decided by the board or its committee based on the company’s requirements within an overall time-horizon of 36 months.
Share holders
Promoter holding in the company stands at about 55.8 per cent, while public holds 44.09 per cent.
BSE filing read as
“Board approved the issuance of equity shares of face value of Rs 5 each of the company on rights basis to eligible equity shareholders of the company as on the record date (to be notified later), of an issue size of up to Rs 21,000 crore”.
“The promoter and promoter group of the company would collectively subscribe to the full extent of their aggregate rights entitlement.”
Comment from Company
“The board of Airtel has constituted a ‘Special Committee of Directors’ to decide the other terms and conditions of the issue including issue period and the record date.
The board of directors at the meeting reviewed the industry scenario, business environment, financial and business strategy of the company and approved the plan to raise further capital.”
Company’s Performance
Airtel added 38.1 lakh wireless subscribers in June, pushing up its mobile user base to 35.2 crore.
Earlier this month, it raised ₹1,005 crore by transferring its ‘right to use’ of 800MHz spectrum in three circles to Reliance Jio, which also assumed future liabilities of ₹469.3 crore related to the spectrum.
Bharti Airtel Group AGR dues stood at Rs 43,980 crore, payment of Rs 18,004 crore has been received even as Rs 25,976 crore is outstanding payable.
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