Spectrum auction wins may push Airtel's debt to $2 bn: Moody’s

NEW DELHI: Bharti Airtel’s debt levels will rise by around $2 billion, or approx `13,400 crore, due to its spectrum wins in the recent auctions, ratings firm Moody's said on Wednesday.

Moody’s, however, retained its Baa3 issuer rating with a ‘stable’ outlook for Airtel, saying the higher debt can be “can be accommodated in the rating for a short time, as cash flow from operations and proceeds from monetisation activities are expected to reduce debt levels considerably within the next 6-12 months”.

“We estimate Bharti’s adjusted leverage, as measured by adjusted debt/EBITDA, will rise into the 3.3x-3.4x range at March 2017 and above our downward trigger level of 3.0x-3.25x,” Annalisa DiChiara, a vice-president at Moody’s, said in a statement.

The telco is expected to use cash from operations and monetisation opportunities, including investments in units, to speed up deleveraging towards 3.0 x within the next 6-12 months, it said.

“The outlook is stable…Bharti has no headroom for any delay in its deleveraging plan. Any delay in deleveraging will put negative pressure on the rating,” the ratings agency said.

Telecom operator had won 173.8 MHz of spectrum across the 1800/2100/2300 MHz bands for an aggregated cost of around Rs 14,200 crore, or about $2.1billion.