Vodafone Idea (Vi) has authorization from its shareholders to offer securities to raise to twenty thousand rupees crore. In an exchange statement on Tuesday, the financially struggling telecom operator stated the decision was made during an additional general meeting that was called to ask shareholders for approval. Even though only 85% of shareholders participated in the online voting, 99 percent of votes were cast in favor of the “special resolution” to raise additional funds.
However, the most recent clearance granted by the board represents just under fifty percent of the initial Rs 45,000 crore that the business had intended to raise. Vi’s board of directors agreed to a Rs 45,000-crore debt and equity fundraising exercise in February. A follow-up issuance will be used to raise the remaining money.
The telecom giant may be able to bring out 5G services and expand its 4G network once the necessary finances have been raised. This will be required to stop the constant movement of consumers out of For the previous 17 months, the telecom has lost customers each month. Based on government figures, at the end of January, it had 19.09 percent of the Indian mobile phone market.
As for the fresh money collected from banks, Vodafone Idea CEO Akshaya Moondra stated last year that they will be used for capital spending rather than servicing current debt. Vi had a massive total gross debt of Rs 2.14 trillion at the end of the third quarter of FY24 (October–December), excluding lease liabilities. Included in this were Rs 1.38 trillion in postponed spectrum payment obligations.
A company representative claims that the latest move would revitalize the fundraising effort and convince the government that Vi is moving forward. Vi has intensified her efforts to obtain funds since March. Vi executives had visited Mumbai and Singapore to meet with institutional investors.
This move will somewhat lower Vi’s debt load. The ruling was made in response to a request made by ATC TIPL to convert 14,400 of its optional convertible debentures (OCDs) into 144 crore shares with a face value of Rs 10.
In February 2023, Vi had given ATC TIPL OCDs valued at Rs 1,600 crore in exchange for money that the latter owed. Vi was using the funds to pay off its debt, which was estimated to be worth more than Rs 2,000 crore, to the US tower company.
