Telecom operator Bharti Airtel on Friday said it has paid Rs 8,815 crore to the government towards the part prepayment of deferred liabilities pertaining to spectrum acquired in the 2015 auction.

The prepayment is for instalments that were due in 2026-27 and 2027-28.

“Airtel prepays Rs 8,815 crore to clear deferred liabilities for spectrum acquired in 2015,” the company said.

Over the last four months, Airtel has cleared Rs 24,334 crore of its deferred spectrum liabilities ahead of schedule.

The liabilities carried an interest rate of 10 per cent and have been paid off through a combination of free cash generated by the business, equity proceeds and significantly lower cost debt of a similar tenor.

In December, Airtel had prepaid its entire liability of Rs 15,519 crore from its 2014 acquisition of 128.4 Mhz spectrum.

The company had said the prepayment would help it in saving Rs 3,400 crore annually in interest expenses.

Airtel said it continues to focus on financial flexibility via its capital structure, including optimising the cost of financing and capitalising on all opportunities of significant interest saves, like the latest prepayment.

Analysts said the move is likely to result in sizeable interest cost savings and improve the company’s cash flows as it ramps up 4G coverage and prepares to participate in the upcoming 5G spectrum auction around May.

The company had reported a 2.8 per cent dip in net profit for the third quarter of the current fiscal year because of a higher tax payments.

Net profit for the quarter stood at Rs 830 crore.

However, Airtel generated free cash flow of Rs 8,803 crore in the third quarter compared with Rs 7,046 crore in the same period last year.

Airtel on Friday informed the stock exchanges it will acquire a 4.7 per cent stake in Indus Towers from Vodafone Group for about Rs 2,388 crore.

The transaction will be executed at a price of Rs 187.88 per share.

On February 25, Bharti Airtel had said it has signed an agreement to buy the stake in Indus Towers on the condition that the proceeds will be used for investment in Vodafone Idea and clearing its dues towards the mobile tower company.

Indus Towers, formerly Bharti Infratel, provides passive telecom infrastructure. It manages towers and communication structures for various operators.

The company’s portfolio of over 1,84,748 towers makes it one of the largest tower infrastructure providers .

The Airtel share closed with a gain of Rs 3.00 , or 0.42 per cent, ending at Rs 709.25 on the BSE.

Indus Towers caters to all wireless telecommunication service providers in India.

“Pursuant to the above referred agreement dated February 25, 2022 entered inter alia into between certain affiliates of Vodafone Group Plc (including Euro Pacific Securities), the company and Nettle, the transaction shall be executed at Rs 187.88 per share basis the agreed price formula in the agreement, aggregating to Rs 23,880.62 million,” Airtel said in the filing.

This will be upon fulfillment of all conditions precedents as agreed by the parties under the agreement, it added