Bharti Telecom seeks nod for FDI of Rs 4,900 cr; infusion to make Airtel foreign firm

PTI New Delhi | Updated on December 08, 2019 Published on December 08, 2019

Bharti Telecom, a promoter of Bharti Airtel, has sought the government’s nod for the infusion of Rs 4,900 crore investment from Singapore-based Singtel and other foreign entities, a move that would make the country’s oldest private telecom operator a foreign entity.

The funds infusion will enhance foreign stakeholding in Bharti Telecom to over 50 per cent that will make it a foreign-owned entity, an official source aware of the development told PTI. Sunil Bharti Mittal and his family own around 52 per cent stake in Bharti Telecom, at present.

Bharti Telecom holds around 41 per cent stake in Bharti Airtel, while foreign promoter entities hold 21.46 per cent stake in the telecom firm. Public shareholders have around 37 per cent stake in the company.

“Bharti Telecom has applied for infusion of Rs 4,900 crore in the company, which includes investments from Singtel and some other foreign investors. With this, Bharti Telecom will become a foreign entity as the majority stake will be held by overseas investors. DoT is expected to approve the investment this month,” the source said.

The Department of Telecom had earlier this year rejected Bharti Airtel’s FDI application as the company had not provided clarity on the foreign investor.

The total foreign shareholding in Bharti Airtel is 43 per cent at present. With promoter firm Bharti Telecom becoming a foreign entity, the foreign shareholding in the company would cross 84 per cent, the source said. Bharti Airtel has been in discussion with Singtel and other entities for funds infusion.

The company in August had informed the stock exchanges that Bharti Telecom, in order to retire some debt, may seek equity from its existing promoter group, which may include an overseas entity and Singtel, in proportion to its holding.

Bharti Airtel has said that even a marginal increase in foreign equity would take the foreign investment in Bharti Telecom above 50 per cent, making it a foreign-owned entity.

Bharti Airtel has already applied to raise the FDI limit to 100 per cent in the company.

The Bharti Airtel board last week approved a proposal to raise $3 billion through a QIP, stake sale and debt papers as the company owes AGR dues of Rs 43,000 crore to the government.

The company will launch one or more QIPs or offer for sale of equity shares or a combination of similar offers to raise $2 billion. The remaining $1 billion will be raised through debentures and bonds.

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Published on December 08, 2019
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