Bharti airtel plans to raise $750 million to $1 billion through a global bond issue. The company will use the funds to settle the debt it raised to fund its expansion in Africa.
The issue will be in the form of debentures and will be valid for 10 years. The proposal will be put up before the company’s board on May 4, 2011, when it meets to discuss results for the financial year-ended March 11.
Banks and individuals in the global market are expected to subscribe the debentures. The final amount to be raised will depend on the interest rate the company gets and the response from promotional roadshows.
Prior to this, the company had said that by March 2011, it would prepay about $900 million of the $7.5 billion loan it took from banks to fund its acquisition of the African assets of Kuwait-based Zain Telecom.
The company had set a target of $5 billion in revenues and $2 billion in EBIDTA for the year-ended March 2013 for its loss-making Africa businesses. The operator has cleared some regulatory issues such as reduced termination rates in Nigeria, Tanzania and Kenya.
It is also hiving off its towers business into a separate company and plans to form a joint venture with other operators on the lines of Indus Towers, a three-way joint venture between Vodafone, Idea Cellular and airtel.
Bharti has outsourced the management of its networks to Ericsson, Nokia Siemens and Huawei and has handed over management of its IT functions in Africa to IBM.
