Airtel may sell assets to pay $3 billion in dues to DoT believes rating agency

• Fitch Ratings is watching Bharti Airtel closely as it has placed it under ‘Rating Watch Negative’.
• The agency further said that Airtel could ‘fund the unpaid dues through a planned stake sale of $2.5 billion-3.5 billion in the combined Bharti Infratel (Infratel) and Indus Tower entity’.
• Bharti Airtel had also announced that it has delayed its second quarter earnings announcement to November 14.

It’s a dark time for Indian telecom giant Airtel.

Global ratings agency Fitch Ratings has placed it under ‘Rating Watch Negative’, after Supreme Court allowed Centre’s plea to recover adjusted gross revenue from telecom service providers.

“The RWN reflects uncertainty on the amount and timing of unpaid regulatory dues, after India's Supreme Court ruled on 24 October in favour of the country's Department of Telecommunication's (DoT) definition of adjusted gross revenue (AGR). This led to DOT's demand that Bharti pay unpaid dues on licence fees of $3 billion. There may be another potential demand of $2.9 billion in regard to unpaid dues on spectrum usage charges,” said the ratings agency.

The numerous fees that Airtel has to pay has also led to speculation that the telecom giant might have to sell stake in subsidiaries.

“Bharti may be able to partly fund the unpaid dues through a planned stake sale of $2.5 billion-3.5 billion in the combined Bharti Infratel (Infratel) and Indus Tower entity, which is awaiting regulatory approval of the merger,” the report said.

Bharti Airtel also delayed its second quarter earnings announcement to November 14. In the first quarter of the current financial year, Bharti Airtel has posted a loss of ₹2,866 crore. In the first quarter last year, Airtel posted a profit of ₹97 crore.