Bharti Airtel eyes US$1bn loan – reports

India’s largest mobile operator Bharti Airtel (BSE: BHARTIARTL) reportedly plans to take out a loan of up to US$1bn to help fund spectrum purchases, expand its network and cut debt.
Airtel aims to raise between US$500m and US$1bn via an external…

India’s largest mobile operator Bharti Airtel (BSE: BHARTIARTL) reportedly plans to take out a loan of up to US$1bn to help fund spectrum purchases, expand its network and cut debt.

Airtel aims to raise between US$500m and US$1bn via an external commercial borrowing, a type of financing used by companies in India to access overseas funds, local media reported.

The company, controlled by billionaire Sunil Mittal, is seeking the approval of the Reserve Bank of India for the loan, after which it is expected to request proposals from banks, according to a Bloomberg report.

A few foreign lenders, including two European banks, are already involved, the Economic Times cited a person familiar saying.

Airtel, which has declined to comment on the matter, agreed to pay Rs293.1bn (US$4.6bn) for airwaves in the country’s record-breaking spectrum auction in March, and is currently rolling out 4G services in major cities.

Earlier this month, it completed tower asset disposals in five of its 13 African markets for US$1.3bn, saying it would use the proceeds to reduce debt. Airtel is now in exclusive talks to sell four of its African units to French incumbent Orange.

Airtel last tapped debt markets in June when it raised US$1bn in a bond offering. The joint lead managers for that issue were BofA Merrill Lynch, Barclays, BNP Paribas, Deutsche Bank, HSBC and Standard Chartered. DBS Bank was the co-manager.

In May, the telco secured financing commitments of up to US$2.5bn from China Development Bank and Commercial Bank of China to boost network development.

Airtel reported net debt of Rs668.42bn (US$10.48bn) for the year ended March 2015, while its net debt to EBITDA level stood at 2.08 times.