Global rating company Fitch Ratings has placed Bharti Airtel Limited's BBB-Long-Term foreign currency issuer default rating (IDR) on Rating Watch Negative (RWN), the agency said in a press release.

Additionally, the agency placed Airtel’s and Bharti Airtel International’s senior unsecured bonds and Network i2i’s subordinated perpetual bonds on RWN.

The development comes following the uncertainties regarding the amount and timing of unpaid regulatory dues in view of the Supreme Court ruling in favour of the telecom department regarding the definition of adjusted gross revenue (AGR).

The rating agency stated that the telecom giant along with Vodafone Idea is likely to skip the upcoming 5G spectrum auction. “We expect the government to hold a 5G spectrum auction in the next 12-18 months. However, we believe the incumbents would be unlikely to participate if they had to pay unpaid regulatory dues in the short term,” the statement said.

Fitch said that Airtel’s funds from operations (FFO) adjusted net leverage could worsen further. However, the agency added that Airtel may be able to partly fund the unpaid dues through a planned stake sale of $2.5-3.5 billion in the combined Bharti Infratel and Indus Tower entity, which is awaiting regulatory approval of the merger.

Earlier, the telecom giant had approached the government to seek clarity on the exact amount and relief on the unpaid dues. Further, the company may also seek relief through filing a review petition in the Supreme Court against the judgement.

First Published:Oct 30, 2019 5:47 PM IST