Government Of Singapore To Invest In Bharti Airtel

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., acting in concert with Singapore’s government and monetary authority, will subscribe to shares worth Rs 5,000 crore in its 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.

A week ago, the company announced plans to raise nearly Rs 32,000 crore through a combination of rights issue and perpetual bonds. Bharti Airtel was planning to raise Rs 25,000 crore through rights issue and the remaining via perpetual bonds.

The fundraise could reduce Bharti Airtel’s debt by 30.5 percent, according to BloombergQuint’s calculations. Its leverage ratio is expected to fall to 2.9.

Why This Deal?

The fundraise was essential for the telecom operator as its liabilities for the ongoing financial year is more than thrice the average cash it generated in the last decade, according to data compiled by BloombergQuint. Its credit rating was downgraded for the first time, by Moody’s, by one notch to ‘Ba1’ from ‘Baa3’, which cited intense competition in the Indian telecom market.