NEW DELHI : Bharti Airtel Ltd prepaid ₹8,024 crore ahead of schedule to clear part of its deferred liabilities for the spectrum acquired in 2015 as part of a plan to save costs.
“The said instalments had an interest rate of 10% and have been prepaid by Airtel, leveraging much lower cost financing available to it,” the telco said in a statement on Monday, noting that the amount was paid to the department of telecommunications.
Airtel continues to enjoy access to well-diversified sources of capital or financing, allowing it to have enhanced financial flexibility in its capital structure, including the optimized cost of financing using all opportunities for significant interest savings, like this prepayment, the carrier added.
On Monday, Bharti Airtel’s stock fell 0.46% to ₹890.6 on BSE.
Bharti Airtel acquired 128.4MHz spectrum for ₹19,051 crore in the 2014 auction, including spectrum belonging to Telenor’s India unit. In September, the government gave telcos the flexibility to prepay deferred liabilities as part of a rescue package. The package also included a four-year spectrum payment moratorium, the option to convert interest on the spectrum and other dues to the government into equity, and reduced bank guarantees.
Companies such as Bharti Airtel and Reliance Jio Infocomm Ltd are using cheap finance to clear high-cost liabilities and refinance loans.
In March 2022, Bharti Airtel paid up ₹8,815 crore before the due dates set for FY27 and FY28 for the same set of airwaves. Prior to that, between November 2021 and March 2022, it had prepaid ₹24,334 crore of its deferred spectrum liabilities ahead of scheduled maturities. It had earlier prepaid ₹15,519 crore due to the government for the spectrum it acquired in the 2014 auctions.
Bigger rival Reliance Jio has prepaid ₹41,583 crore to the telecom department since October 2021, clearing dues for all spectrum bought in auctions before March 2021.
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Updated: 01 Aug 2023, 12:33 AM IST