Bharti Airtel on Saturday said it has received financing commitments of up to USD 2.5 billion from China Development Bank and Industrial and Commercial Bank of China, with an average maturity of about nine years.
The company signed the term sheets for the financing options in the presence of Prime Minister Narendra Modi, who is currently on an official visit to China. Airtel said the funds will help the company further diversify its global financing pool and invest in growth of data networks.
"China Development Bank has committed financing of up to USD 2 billion with an average maturity of about nine years," Airtel said.
This is the "single-largest bilateral commitment by China Development Bank to any telecom operator globally and the largest bilateral commitment to a private Indian company". "Industrial and Commercial Bank of China has committed USD 500 million with an average life of about nine years," Airtel added.
Subject to final agreements and requisite approvals, Bharti Airtel can draw these funds over a long availability period, depending on its financing requirements.
Rajan Bharti Mittal, Vice-Chairman, Bharti Enterprises, said, "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."In an interview to CNBC-TV18, Mittal said that a billion dollar will be kept for the equipment supplies which comes both for India and Africa Huawei, ZTE and others from China. A billion dollar has been signed against the spectrum that we have just won in India and so, this funding can be used in case there is a need, he added.
In March 2015, Bharti Airtel announced a strategic collaboration with China Mobile, under which the two companies will work towards growth of the Long-Term Evolution (LTE) ecosystem and evolving mobile technology standards. Bharti Airtel also has network equipment sourcing agreements with ZTE and Huawei.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
