Bharti Airtel Said to Plan $1 Billion Loan for Spectrum Purchase

Bharti Airtel Ltd., India’s largest wireless carrier, is planning a $1 billion loan to partly fund spectrum purchases, people familiar with the matter said.

Bharti is seeking Reserve Bank of India approval for the loan, known as an external commercial borrowing, according to one of the people. It is expected to send out requests for proposals to banks once it gets the green light, the person said, asking not to be identified as the information is private.

The company, controlled by billionaire Sunil Mittal, has to pay 291.3 billion rupees ($4.6 billion) for the airwaves it bought in a March government auction. Bharti raised more than $1.3 billion earlier this month selling mobile-phone towers in five markets and is in exclusive talks to sell its units in Burkina Faso, Chad, Republic of Congo and Sierra Leone to Orange SA.

An external commercial borrowing, or ECB, is a type of financing used in India to help companies access overseas funds. It can include foreign-currency commercial loans, as well as other instruments like fixed- and floating-rate bonds, whose interest rates are capped by the Indian central bank.

In June, Bharti raised $1 billion selling bonds overseas at its lowest ever coupon. It sold the 4.375 percent notes due 2025 at a 210 basis point spread over 10-year U.S. Treasuries, according to data compiled by Bloomberg.

“The company has a diverse financing portfolio and it keeps evaluating various financing options from time to time including ECBs, bank loans, bonds and new lines of credits,” Bharti said in an e-mailed statement Wednesday. “However, we will be unable to comment on any specific financing plan of ours.”

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