Vodafone Idea to allot 2.9% stake to ATC

20 Mar 2024 , 03:03 PM

Packed with debt The loss-making telecom Vodafone Idea informed the Bombay Stock Exchange on Tuesday that it would assign equity shares worth ₹1,440 Crore to ATC Telecom Infrastructure from optionally convertible debentures, or OCDs. After conversion, ATC will own 2.9% of the updated shares, the business informed Mint.

In accordance with the conditions of the OCDs, ATC requested on March 18, 2024, from VIL to convert 14,400 OCDs, or ₹1,440 Crore, into 1.44 billion fully paid-up equity shares, with a face value of ₹10 per. In accordance with the conditions of the aforementioned OCDs, VIL will take the appropriate steps to assign the equity shares to ATC,” the carrier stated in an exchange filing.

Vodafone Idea has outstanding debts that it has not yet paid to suppliers and companies that supply tower services, such as ATC and Indus Towers. Indeed, ATC is pulling out of the Indian market.

In October 2022, the Aditya Birla Group company issued overdraft debt notes (OCDs) to ATC Telecom Infrastructure Private Ltd (ATC) for ₹1,600 Crore. The revenues from these notes were utilised to settle ATC’s outstanding debts. According to the business, the conversion price of ₹10 at the time of the OCD issue was higher than the market price of VIL shares at the time.

The redemption period of the first tranche of OCDs, which totalled ₹800 Crore, was extended by a full year in August 2023.

The financially stressed telco, which ranks third in terms of users, is trying to raise ₹45,000 Crore, which includes ₹20,000 Crore from current investors in the form of an equity-based capital raise.

The operator anticipates concluding the equity fundraise by the end of the forthcoming June quarter, following a shareholder meeting scheduled for April 2.

After raising equity funds, Vodafone-Idea will seek to raise the remaining funds through loan financing.

Since 2020, the airline has been attempting to raise money. In the capital-intensive Indian telecom market, where competitors Reliance Jio and Bharti Airtel have invested more than ₹1 trillion to bring out 5G services, funding is essential for Vodafone Idea’s survival and expansion.

Vodafone Idea purchased the necessary spectrum in 2022 but has not yet introduced 5G services on a commercial basis. In four circles, it fulfilled the minimal rollout requirement. In a presentation to investors last week, the company stated that its management anticipates earning forty percent of its income from the 5G sector in the next 24 to 30 months. The management is scheduled to do roadshows in Singapore and Mumbai.

For feedback and suggestions, write to us at [e-mail]