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Bharti Airtel Ltd’s planned $ 2.8 billion equity issuance will improve its net leverage to around 2.0x (end-March 2021: 2.1x) and provide funds to strengthen its market position, according to Fitch Ratings. Bharti will raise equity in three tranches, a quarter of the proceeds to be received upfront and the balance in two installments within three years.
Bharti’s management remains committed to an investment-grade rating. The company raised about $9 billion in FY20 and FY21 via equity issuance, selling a stake in subsidiary Airtel Africa Plc and the sale-and-leaseback of towers in Africa. The company management aspires to achieve a debt/EBITDA ratio of around 2.0x in the long term, Fitch said. Bharati carries a rating of “BBB-/Negative”.
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Fitch has forecast that Bharti’s Capex will increase to about $5 billion in FY22 (FY21: $4.6 billion), of which $1.5 billion is likely to be paid upfront to acquire 5G spectrum assets. The company will seek to strengthen its fibre infrastructure – connecting towers with fibre and backhaul infrastructure to prepare its network to launch 5G services in 2022-2023. The capex on 5G infrastructure during 2022-2023 will replace 4G investments, as 4G coverage is mainly complete, the rating agency added.
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