Bharti Airtel on Saturday signed agreements to raise up to $2.5 billion from China Development Bank and Industrial and Commercial Bank of China.
The company will invest these funds in growth of data networks across its global operations. In addition, these financing options will allow the company to diversify its global financing pool. Subject to final agreements and the requisite approvals, Bharti Airtel can draw these funds over a long availability period, depending on its requirements.
Airtel inked the term sheets for the financing options in the presence of Prime Minister Narendra Modi during his visit to China.
China Development Bank has committed financing of up to $2 billion with an average maturity of about nine years. This is the single largest bilateral commitment by China Development Bank to a telecom operator globally and the largest bilateral commitment to a private Indian company.
Industrial and Commercial Bank of China has committed $500 million with an average life of about nine years, making it the largest and longest bilateral commitment to an Indian telecom operator.
“We are pleased to sign these agreements as part of the growing economic cooperation between India and China. It is an endorsement of the long term potential of the Indian telecom 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 Digital India initiative,” Rajan Bharti Mittal, Vice Chairman, Bharti Enterprises, said in a statement.
In March 2015, Bharti Airtel had announced a strategic collaboration with China Mobile, under which the two companies are working toward the growth of the LTE ecosystem and evolving mobile technology standards. Bharti Airtel also has network equipment sourcing agreements with ZTE and Huawei.
