Bharti Airtel founder and CEO Sunit Mittal stated on Monday that the telecom company has been “laden with extraordinary debt”, and for this reason, the company won’t shrink back from raising tariffs. During an investor call, Mittal also said that he is still favouring the monetisation of assets but at the right time.
“Airtel is loaded with massive debt, and we want to reduce the debt pile to have access to fast-paced capitals.”
The comments came a day when Bharti Airtel’s board approved its plan to raise $2.86 billion by selling shares ahead of its rollout to 5G. Airtel is somewhere on the same path where Vodafone-Idea (VI) was a few months back.
Vodafone Idea board also agreed to raise Rs. 25,000 cr by selling shares to existing stakeholders. The fundraising helped the company get its finances moving in the right direction as it takes several steps to cut the cost.
“The board of directors has comprehensively reviewed the market scenario, environment, financial and business strategy before approving the company’s plan to raise capital to improve the debt leverage,” the telecom company stated in a notice to Stock Exchange. The shares will be priced at Rs. 535 each, the telco added.
Google Is In Discussion To Make Huge Investment In Airtel
After its significant investment of more than 34,000 crores in Mukesh Ambani’s Reliance Jio Platform, American Internet Giant Google is said to be in talks to make a “Huge Investment”, running into several crores,” into Airtel.
Alphabet Inc’s Google is in the “Advance stage of negotiation” with Airtel for nearly the past two years, and the deal size could be significantly large. However, the strategic planning behind investing in Jio’s primary rival in India may threaten its investment in Jio.
However, the top sources in the know of Airtel added that Google would demand “Very Strong Reasons” and a strategic valuation to make an entry into the second biggest telecom company in India.
“Google’s entry to Airtel will strengthen the company’s balance sheet as the company is struggling to improve the debt leverage. Moreover, Google’s data monetisation will bring innovation and strengthen the company’s data analytic capabilities. In FY 2020, Bharti Airtel reported a net debt of INR 1144 billion, which was reduced to Rs. 1.6 lakh crore at the end of June 2021.