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., 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 BloombergQuint’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 rights of subscribing to Bharti Airtel shares to the Government of Singapore and the Bharti Group.

The Bharti Group was supposed to put in close to Rs 6,963 crore, which, according to BloombergQuint’s calculations, has increased to Rs 8,035 crore. The reduced contribution from SingTel could be because it was wary of funding this infusion by adding debt to its books.

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.

The rating agency Moody’s changed its outlook on Bharti Airtel from stable to negative citing rising leverage as a concern.