Vodafone Idea's Rs1600 crore fundraising at halt as govt maintain silence on equity call

7 Dec 2022 , 10:38 AM

Yet another search for a lifeline seems to be turning futile for Vodafone Idea as the loss-making telco’s much-needed Rs1,600 crore fundraising plan is put on hold. Reportedly, the government is keeping silence on picking up the proposed 33% stake in the company.

The development complicates the matter further for the company, which has a total debt of Rs 2.2 trillion, including significant government obligations.

This comes amid a group-wide crisis at Vodafone, the Aditya Birla group’s Newbury (Berkshire)-based partner in Vi.

Vodafone announced the resignation of group CEO Nick Read on Monday, as he failed to halt the continuous dip in the share price and get the big global merger deals moving.

Back at home, Vi informed the stock exchange on Tuesday that the shareholder resolution for the issuance of optionally convertible debentures to American Tower Corporation (ATC) had lapsed due to the lack of government approval for the conversion of interest on adjusted gross revenue and spectrum dues into equity.

ATC has clearly mentioned that for any fund infusion by the company, Vi has to issue an equity stake to the government. ATC has already expressed uncertainty over receiving timely payments from Vi.

According to government sources, the conversion of interest into equity would be contingent on Vodafone Idea promoters injecting funds. The promoters, for their part, have not invested additional funds.

Vi has been struggling to raise funds for several months, resulting in late vendor payments and subscriber loss. It has been unable to sign contracts with 5G network equipment manufacturers despite competition aggressively rolling out its services.

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