Vodafone Idea hold talks to refinance ₹3,000-4,000 cr of loans: Report
2 min read 13 Feb 2023, 08:49 AM ISTThe report said that refinancing of some debt will help free up cash for Vodafone Idea, which needs to pay substantial vendor dues – to tower companies such as Indus Towers and network equipment makers like Ericsson and Nokia
PremiumDebt-ridden telecom operator Vodafone Idea has started fresh talks with key lenders – State Bank of India, Punjab National Bank and HDFC Bank – to refinance ₹3,000 to 4,000 crore of loans, according to an Economic Times report.
The report further said that refinancing of some debt will help free up cash for Vodafone Idea, which needs to pay substantial vendor dues – to tower companies such as Indus Towers and network equipment makers like Ericsson and Nokia.
Last month in January, Indus Towers had made provision of doubtful debt worth ₹2,298.1 crore on account of troubled balance sheet of VIL. It is in the process of issuing optionally convertible debentures of up to ₹1,600 crore to vendor American Tower Corporation to clear its dues.
VIL has made several attempts to raise capital from investors but failed due to the adverse market condition and huge debt on its balance sheet.
Last week, Vodafone Idea had approved the allotment of equity shares worth ₹16,133 crore to the government, which post-allocation has become the largest shareholder with a 33.44 per cent stake in the firm.
The company in a regulatory filing said the shares have been allocated to the government in lieu of conversion of interest dues arising from deferment of adjusted gross revenue and spectrum auction payments.
"...it is hereby informed that the board of directors of the company has, at its meeting held today approved the allotment of 16,133,198,899 equity shares of face value of ₹10 each at an issue price of ₹10 per equity share aggregating to ₹161,331,848,990 to the Department of Investment and Public Asset Management, Government of India," according to the filing.
The government has cleared conversion of ₹16,133 crore interest dues of debt-ridden Vodafone Idea into equity after receiving a firm commitment from Aditya Birla Group to run the company and bring necessary investment.
Shares of Vodafone Idea Ltd jumped nearly 25% on 6 February after the government allowed the carrier to convert the $2 billion interest on dues owed to the sovereign into equity, which could free up some cash flows in the near term.
Back in 2021, India had approved a bailout package for the debt-strapped telecom companies, allowing them to convert interest on deferred adjusted gross revenue owed to the government into equity.
VIL decided to avail that option and will issue ₹1,613 crore shares at ₹10 a piece worth ₹16,133 crore, the mobile carrier had said earlier.
Vodafone Idea, a joint venture between Britain's Vodafone Group and Aditya Birla Group's Idea Cellular, was formed in 2018 to take on the intense price war unleashed by billionaire Mukesh Ambani's wireless venture Reliance Jio.
Shared of VIL closed at ₹7.88 apiece, up by 0.13 per cent compared to previous close, at the BSE on Friday.
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