Shareholders of India’s third biggest telco, Bharti Airtel, have given the green light for the company to raise a total of $3 billion, to help pay down outstanding dues.
The proposal passed with 99.99 per cent of shareholders backing the plan to raise $2 billion in equity and an additional $1 billion in new debt. The resolution was passed at the company’s EGM, ehich was held on the 3rd of January.
Bharti Airtel will use the funds to pay down outstanding dues to the Department of Telecoms, following a High Court ruling which redefined the way Indian telcos calculate their adjusted gross revenues.
The ruling saddled India’s telecoms giants with an additional $8 billion of dues relating to their spectrum licence payments. Of the $13 billion total, Bharti Airtel is reportedly liable for around $3 billion.
The ruling comes at a time when India’s cash strapped mobile network operators can least afford it, with the country’s big three battling to balance the ultra-fine trading margins of the Indian market with the gargantuan capital investment demands of 5G. At present, all three of the country’s big three mobile network operators exist on ARPUs of just $1.50.
Both Bharti Airtel and Vodafone Idea had originally asked for extended payment terms to be attached to the dues, giving telcos the option of paying off their debt in instalments. However, India’s Department of Telecoms wrote to the pair in December, saying that it expected payment to be made in full, within three months. The telco now have until the end of January to begin making payment of the outstanding dues.