Vodafone Idea’s (VIL’s) board on Wednesday approved a fund-raise of up to Rs 436.21 crore from Euro Pacific Securities, which is a Vodafone Group entity and promoter of the company, on a preferential basis. The funds can be raised by way of issuance of either up to 42,76,56,421 equity shares of face value of Rs 10 each, or up to 42,76,56,421 warrants convertible into equity shares.
The relevant date, in terms of provision of ICDR Regulations for determining the floor price of the preferential issue, in either case, is June 15, 2022, the company said in a filing to the BSE.
The board also approved convening of an extraordinary general meeting on July 15, to seek approval of shareholders for the aforesaid preferential issue.
The promoters of VIL (Vodafone Group and Aditya Birla Group) had infused Rs 4,500 crore into the company in March. With this infusion, the promoters’ infusion would be to the tune of Rs 4,936 crore. The company had announced a Rs 25,000 crore fund-raising exercise, of which Rs 5,000 crore will be from the promoters, while the remaining Rs 20,000 crore will come from lenders and investors.
VIL’s fund-raising efforts have got expedited as the government is going to soon approve conversion of its debt into equity in the company. This will help the financially-stressed telecom operator to complete its targeted Rs 25,000-crore fund-raising exercise. It will also help it participate in the upcoming 5G spectrum auctions.
Vodafone Idea CEO and managing director, Ravinder Takkar, had recently told FE that lenders and investors are comfortable now and once the government converts its debt into equity, funding from these two sources would come.
After the equity conversion, the government will hold 32% stake in Vodafone Idea, and the promoters stake will get diluted to around 50% from the current 75%.