Bharti’s net debt at the end of September quarter was Rs 1.66 crore.

Bharti Airtel said on Friday that it had paid Rs 15,519 crore to the Telecommunications (DoT) Department for the prepayment of all deferred obligations relating to the spectrum obtained in the auction held in 2014. The company has acquired 128.4MHz, which Spectrum includes. I got it from Telenor for Rs 19,051 crore in a 2014 auction.

These liabilities were due in annual installments from FY26-2027 to FY31-2032 and carry an interest rate of 10% (the highest rate between liabilities and deferred loans) and an average remaining life of more than 7 years. The company said the prepayment would likely result in interest cost savings of around Rs 3,400 crore over the remaining life of the entire replacement capital.

Then, Bharti was left with a spectral receivable of around Rs 75,000 crore, which is paid in deferred installments after 2032 as the company recently opted for a four-year deferral of such payments, which are provided by the government. This means that the company will now pay spectrum dues in installments for airwaves purchased at auctions held in 2015 and beyond.

Bharti’s net debt at the end of September quarter was Rs 1.66 crore.

The government held the first auctions in 2010 for the 3G spectrum but at that time the companies had to pay the full bid amount up front. The government has only introduced the deferred payment concept in auctions held since 2013. Under this, companies are supposed to pay 25-33% of the total bid amount up front, followed by a two-year deferment and the rest in equal installments spread over 16 years while maintaining net worth current.

The government had introduced an additional two-year moratorium – fiscal year 21 and 22 – for businesses on premium payments, and a four-year moratorium as part of a recovery package introduced in September this year.

Bharti said it continues to exercise flexibility toward a stronger and more efficient capital structure. The Company welcomes the DoT’s decision that gives the industry the flexibility to prepay its deferred liabilities at any time on a net present value basis at the interest rates set for the respective auction. This allows licensees to efficiently plan and use their cash flows, the company said in a statement.

Prior to Bharti, Reliance Jio has fully liquidated the deferred spectrum receivables relating to the 2016 auction of approximately Rs 10,700 crore.

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