Singapore Telecom Ltd., co-promoter of Bharti Airtel Ltd., intends to subscribe to its full entitlement in shares that the operator will issue to existing investors to raise funds in October.
Bharti Airtel's rights issue to mop up Rs 21,000 crore at Rs 535 apiece will open on Oct. 5 and close on Oct. 21, according to its exchange filing. That means Singtel will spend about Rs 2,940 crore (about $405 million) over three years to subscribe to its allocation based on its 14% ownership. It will remain the single-largest shareholder.
Shareholders owning Bharti Airtel stock as on Sept. 28 (record date) will be eligible. Investors will be entitled to 1 share for every 14 held.
The terms of payment:
25% of the price (Rs 133.75 apiece) to be paid at the time of application.
The remaining 75% (Rs 401.25) will be paid in two or more calls decided by the board.
The maximum timeframe for the payment is 36 months.
The telecom company had approved the issue at its board meeting on Aug. 29.
Singtel said the funds will help Bharti Airtel invest in 5G capabilities and ride the digital growth momentum in India.
“Our participation in this rights offering underscores our confidence in Airtel's growth prospects,” Arthur Lang, Singtel's Group chief financial officer, said in a statement. Along with Indian government's relief measures on statutory payments, he said, the fundraising will “significantly improve Airtel's liquidity".
With India's smartphone users expected to cross 90 crore in the next two years and broadband connections growing at a steady pace, Singtel said Bharti Airtel seeks to capture opportunities in areas such as 5G, home broadband, data centres, cloud services, and cyber security.
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