Bharti Airtel Ltd. has found a new investor: the Government of Singapore
India’s second largest telecom company said in an exchange filing that GIC Pvt. Ltd., backed by the Singapore’s government and monetary authority, will subscribe to shares worth Rs 5,000 crore in a proposed rights issue.
The promoters of the Sunil Mittal-controlled company said they have transferred their right of subscribing to the shares in favour of the Singapore government. The state will own close to 4.4 percent in Bharti Airtel at a discount of nearly 29 percent, according to Bloomberg Quint’s calculations.
Earlier the promoter group - Bharti Airtel and SingTel - was supposed to fund nearly Rs 16,785 crore in the proposed rights issue. However, with the transfer in rights the amount stands at Rs 11,785 crore, the bulk of which will come from Sunil Mittal. Singapore-based SingTel in a separate announcement said that it will put in close to Rs 3,750 crore. This means that SingTel has transferred its right.
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GIC picks up Singtel’s tab sinking S$1b into “junk-rated” Indian telecom company
Last Thu (7 Mar), Bloomberg published a news article revealing that Singapore’s GIC will be investing Rs5,000 crore (S$972 million) into the troubled India’s second largest telecom company, Bharti Airtel Ltd.
About a week ago, Bharti Airtel decided to announce plans to raise nearly Rs32,000 crore (S$6.2 billion) through a combination of rights issue and perpetual bonds. Bharti Airtel was planning to raise Rs25,000 crore (S$4.9 billion) through rights issue and the remaining via perpetual bonds.
The fundraising is to help reduce Bharti Airtel’s current massive net debt estimated to be Rs 1.06 lakh crore (S$21 billion) as at the end of last year. It’s current market capitalization is about Rs 1.3T (S$25 billion).
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