Airtel pays Rs 15,519 crores to DoT to pre-pay entire deferred liabilities for spectrum acquired in 2014

Airtel pre-pays INR 15,519 crores to clear all deferred liabilities for spectrum acquired in 2014. The move will help company save interest cost.

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Telecom giant Bharti Airtel yesterday announced that it had pre-paid Rs 15,519 crores to the Telecom Department towards pre-payment of the entire deferred liabilities. The deferred liabilities pertain to the spectrum acquired by Bharti Airtel during Spectrum Auction 2014. Bharti Airtel had back then acquired 128.4 MHz spectrum (including Telenor spectrum) for a cash consideration of Rs 19,051 crores in Spectrum Auction 2014.

As per Airtel’s estimates, the prepayment will help the company to save interest cost of Rs atleast 3,400 crores over the residual life of fully substituted capital. The deferred liabilities would have been due in annual installments from FY 2026-27 to 2031-32 along with an interest rate of 10 percent and an average residual life of 7 or more years. The interest rate is said to be the highest rate among the deferred liabilities and borrowings.

Airtel continues to exercise flexibilities towards a stronger and efficient capital structure. The company welcomes the Department of Telecom’s decision giving the industry the flexibility to prepay their deferred liabilities anytime at their NPV basis the interest rates specified for the respective auction. This allows the licensees to efficiently plan and use their cash flows,” said Airtel in a statement.

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Avatar of Basil Kannagi Arasu
Basil Kannagi Arasu

Editor-in-chief

Basil keeps an eye on the latest happenings in the Telecom sector. In his free time, you can find him streaming the Premier League which he started watching in 2013.

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