Bharti Airtel International begins cash purchase of its USD 1.5 bn bonds to reduce debt

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Bharti Airtel on Saturday mentioned it is going to pre-pay USD 1.5 billion debt with its subsidiary Bharti Airtel International (Netherlands), utilizing the proceeds it received from six world entities investing in its Africa unit.

Bharti Airtel International (Netherlands) B V commenced cash purchase of USD 1.5 billion, 5.125 per cent Guaranteed Senior Notes which had been due in 2023, Bharti Airtel mentioned in a regulatory submitting.

This provide, it mentioned, has been made with a view to “proactively manage its capital structure, reduce gross debt and leverage by acquiring the Notes funded out of equity proceeds and also provide liquidity to Noteholders at a premium to the market.”

Bharti Airtel group continues to deleverage and pursue its ?methods in direction of that finish, it added.

“In line with this, it has been actively exploring various equity driven initiatives, including those previously announced regarding its Africa business, so as to proactively manage its balance sheet and capital structure to align them to the group’s core conservative  philosophy,” it mentioned.

Bharti Airtel International’s (Netherlands) father or mother Airtel Africa Ltd, a UK integrated subsidiary of Bharti ?Airtel Limited, lately made a profitable major fairness issuance of USD 1.25 billion to six main world buyers, together with Warburg Pincus, Temasek, Singtel, SoftBank Group and others.

“The proceeds of this equity issuance are intended to be used to reduce Airtel Africa’s ?existing debt of approximately USD 5 billion on the date of the announcement,” it mentioned.

The proceeds of this fairness issuance are actually totally realised and out there as cash. The firm additionally carries natural cash on its stability sheet.

“The firm needs to make the most of the proceeds of this fairness issuance and the cash out there to it to reduce its current debt by providing to purchase ‘any and all’ of the Notes pursuant to the Tender Offer.

“Via the Tender Offer, the company is also providing liquidity to the Noteholders at a specified premium over the market price at launch,” the submitting mentioned.

This provide is as well as to the beforehand introduced tender provide cum compensation of EUR 1 billion four per cent notes maturing December 2018, for which funding has been drawn and out there as cash with the corporate.

Earlier this week, Moody’s Investors Service had positioned Bharti Airtel’s ranking on evaluation for downgrade on low ranges of profitability and expectation of weak cash move.

Moody’s had positioned on evaluation for downgrade the ‘Baa3’ issuer and senior unsecured ranking of Bharti Airtel and the scores on the backed senior unsecured notes issued by Bharti Airtel International (Netherlands) B V.

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