Airtel prepays Rs 8,815 cr of spectrum dues to reduce interest expenses

 This is the second such prepayment by Airtel in the last three months and comes on the back of strong cash flow generation, equity infusion and borrowing at significantly lower interest rates

Bharti Airtel has prepaid Rs 8,815 crore of spectrum dues to cut down on interest expenses. The dues pertained to spectrum acquired in 2015 and payments for same were due in FY2027 and FY2028, the telecom company announced on Friday. This is the second such prepayment by the company in the last three months and comes on the back of strong cash flow generation, equity infusion and borrowing at significantly lower interest rates.

“Over the last four months, Airtel has cleared Rs 24,334 crores of its deferred spectrum liabilities much ahead of scheduled maturities. These liabilities carried an interest rate of 10 per cent,” it said. After the latest payment, Airtel has balance spectrum dues of around Rs 67,000 crore and adjusted gross revenue dues of Rs 25,000 crore.

“Airtel continues to focus on financial flexibility via its capital structure including optimising cost of financing and capitalising on all opportunities of significant interest saves like this prepayment,” the company said in a statement. In December it had prepaid its entire liability of Rs 15,519 crore from its 2014 acquisition of 128.4 MHz spectrum. At that time Airtel had said the prepayment would help it in saving Rs 3400 crore annually in interest expenses.