Bharti Airtel inks US$2.5bn financing deals

Bharti Airtel has secured financing commitments of up to US$2.5bn from China Development Bank (CDB) and Industrial and Commercial Bank of China (ICBC).
CDB will provide a US$2bn credit line, with an average maturity of nine years, Airtel said in a…

Bharti Airtel has secured financing commitments of up to US$2.5bn from China Development Bank (CDB) and Industrial and Commercial Bank of China (ICBC).

CDB will provide a US$2bn credit line, with an average maturity of nine years, Airtel said in a statement, noting that this marks the bank’s largest single bilateral commitment to an Indian company and the largest to any telco globally.

ICBC will provide a US$500m credit line, also with an average nine-year maturity. This is its largest and longest bilateral commitment to an Indian telco.

Airtel, India’s largest telco by subscriber numbers, signed the term sheets for the transactions during Prime Minister Narendra Modi’s three-day visit to China as the countries seek to strengthen economic ties. The credit lines remain subject to requisite approvals, including clearance from the Reserve Bank of India.

The New Delhi-based telco, which has operations in 20 countries across Asia and Africa, said the funds will allow it to diversify its global financing pool and access funds to invest in the growth of data networks internationally.

Bharti Enterprises vice chairman Rajan Mittal said the agreements were evidence of the growing economic cooperation between India and China.

“It’s an endorsement of the long-term potential of the Indian telecoms sector. Given the availability period of three years, these financings shall further add to the financial flexibility that the company already has. These shall further extend tenors, enabling investments for furtherance of the [government’s] Digital India initiative.”

Airtel already has ties with Chinese companies. In March, it announced a strategic collaboration with China Mobile that will see the two operators work together to develop LTE services. It also has network equipment sourcing agreements with Chinese manufacturers ZTE and Huawei.

Airtel agreed to pay Rs293.1bn (US$4.6bn) for spectrum in the country’s latest spectrum auction, and is currently rolling out 4G services in major cities. It claimed to have more than 324 million customers across its operations at the end of March 2015.