Bharti airtel has put a proposed sale of bonds worth $1 billion to global investors on hold, on account of weak investor interest for the issue.
The company had recently appointed seven banks, Barclays Capital, Standard Chartered, Deutsche Bank, HSBC, UBS, BNP Paribas and Credit Agricole, to manage the proposed issue.
It is believed that that based on feedback from investors, the joint book runners to the issue proposed a pricing of around 350 basis points or 3.5 per cent above the 10 year US treasury rate for the issue. The rate of return available to investors in the 10 year US treasury is 3.18 per cent.
Bharti had planned to issue the bonds from its African subsidiary, Bharti airtel International Netherlands (BAIN), which acts as the holding company for the African operations it acquired from Kuwaiti telecom major Zain in June 2010.
The proposed bond issue would have helped Bharti refinance some of the high-cost debt on Zains’ balance sheet.
Bharti acquired Zain’s African operations for an enterprise value of $10.7 billion and agreed to absorb $1.7 billion of debt on the balance sheet of the company as part of the deal.
It financed payouts worth $9 billion for the acquisition by raising a multi-tranche loan of $ 7.5 billion from a consortium of lenders led by Standard Chartered Plc.
