India’s largest telecom service provider, Bharti Airtel, on Monday announced clearing debt of Rs. 6,796 crore, which is close to 10% of its total debt. The company has repaid this debt with proceeds received from selling its 5% equity stake to Qatar Foundation Endowment (QFE) last month.
The company had net debt of Rs. 63,839.5 crore as on March 31, 2013.
“Bharti Airtel Limited has announced that it has retired equivalent debt from the proceeds of the preferential allotment in June 2013 of 5% equity shares in Bharti Airtel at Rs. 340 per share to Qatar Foundation Endowment,” a statement issued by the company said.
Last month, Bharti Airtel had issued 199,870,006 new equity shares, representing 5% equity stake in the company, to QFE for a total consideration of Rs. 6,796 crore.
QFE is an investment firm that was set up recently for the purpose of funding the activities of Qatar Foundation, a not-for-profit organisation of Qatar’s royal family.
“Bharti Airtel noted that this significant debt reduction will result in an improvement in the capital structure and balance sheet leverage for the company,” the statement added.
India’s telecom sector is presently reeling under a cumulative debt of about Rs. 2.5 lakh crore. In some companies like Bharti Airtel, most of the debt is in dollars. The recent depreciation of Indian currency also had negative impact on their balance sheets.