Indian telco Bharti Airtel has proposed to raise up to US$3 billion (S$4 billion) from a mix of debt and equity, which will enable it to pay a hefty fine as well as finance capital expenditure.

The firm, which is an associate of Singtel, is looking to issue shares worth US$2 billion via a qualified institutional placement, according to a bourse filing yesterday.

The issue price will be determined by Airtel in consultation with the appointed book-running lead managers. The preliminary placement document was filed on Wednesday.

Airtel is also planning to issue up to US$1 billion in foreign currency convertible bonds. Fitch Ratings has assigned a BBB-/ RWN rating to the proposed bond sale.

The capital-raising exercise is taking place as the phone carrier has to fork out billions of dollars in statutory dues to the Indian government by Jan 24, as mandated by the Supreme Court.

The country's top court ruled last October that India's mobile operators, including Airtel, had to pay the state a total of 920 billion rupees (S$17.4 billion) in penalties plus interest within three months.

The verdict ended a protracted 14-year legal tussle over the definition of "adjusted gross revenue".

Separately, the firm has announced two tariff hikes to end a bruising price war among India's top three telecom players.

THE BUSINESS TIMES