Telecom operator Bharti Airtel on Friday said it has cleared deferred liabilities worth Rs 15,519 crore for the spectrum it acquired in 2014.
Bharti estimates that the prepayment will probably result in interest cost savings of at least Rs 3,400 crore over the residual life for fully substituted capital.
Spectrum details
The company had acquired 128.4 MHz spectrum (including Telenor spectrum) for a consideration of Rs 19,051 crore in the 2014 auction.
Liability
The liabilities were due between 2026-27 and 2031-32 with 10 per cent interest, which was the highest rate amongst deferred liabilities and borrowings. It carried an average residual life of more than 7 years.
Company’s financial
The company registered net profit of Rs 1,134 crore for the September 2021 quarter against a loss (attributable to owners of the parent) of Rs 763.2 crore during the year-ago quarter.
Comment from Airtel
“Airtel continues to exercise flexibilities towards a stronger and efficient capital structure. The company welcomes the telecom department’s decision giving the industry the flexibility to prepay their deferred liabilities anytime at their NPV basis the interest rates specified for the respective auction. This allows the licensees to efficiently plan and use their cash flows.”
Impact on stock
Bharti Airtel share price slumped 3 percent intraday to Rs 661.30 on December 17 after the company made an advanced payment.
At 1:12pm, Bharti Airtel was quoting at Rs 668.00, down Rs 14.20, or 2.08 percent, on the BSE.
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