Bharti Telecom seeks fresh funding from Singtel, making Airtel a foreign firm

Bharti Telecom, one of the main promoters of Bharti Airtel, has sought India government’s approval for the investment of Rs 4,900 crore from Singapore-based telecom operator Singtel and other foreign entities.
Singtel and 5GThe development would make the private telecom operator a foreign entity, PTI reported on Sunday.

The funds infusion will enhance foreign equity holding in Bharti Telecom to over 50 percent that will make it a foreign-owned entity. Sunil Bharti Mittal and his family own around 52 percent stake in Bharti Telecom.

Bharti Telecom holds around 41 percent equity stake in Bharti Airtel, while foreign promoter entities hold 21.46 percent stake in the telecom firm. Public shareholders have around 37 percent 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 report 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 percent at present. With promoter firm Bharti Telecom becoming a foreign entity, the foreign shareholding in the company would cross 84 percent. 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 percent, making it a foreign-owned entity.

Airtel has already applied to raise the FDI limit to 100 percent in the company.

Meanwhile, 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 telecom operator 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.