Vodafone Idea’s board on Thursday approved raising of up to Rs 14,500 crore, of which Rs 4,500 crore would come from promoter entities – Vodafone Plc and Aditya Birla Group. While promoters would be issued shares on a preferential basis at Rs 13.30 a piece, the balance Rs 10,000 crore would be raised via equity and debt instruments such as American Depository Receipts, Global Depository Receipts and foreign currency convertible bonds.
Recently, Vodafone Plc raised about Rs 1,442 crore by selling its 2.4% stake in tower firm Indus through a block deal. It has entered into an arrangement with Bharti Airtel to sell an another 4.7% stake in the tower firm. In total, Vodafone Group would be able to raise around Rs 3,000-3,500 crore through the stake sale.
The Aditya Birla Group holds a 27.66% stake in Vodafone Idea, while Vodafone Plc holds 44.39%.
The company said that the board has cleared the issuance of up to 338.3 crore equity shares of face value of Rs 10 each at an issue price of Rs 13.30 per equity share for an aggregate consideration of up to Rs 4,500 crore. These shares will be issued to Euro Pacific Securities and Prime Metals (Vodafone Group entities and promoters of the company), and Oriana Investments (an Aditya Birla Group entity) on a preferential basis.
The board also approved the convening of an extraordinary general meeting on March 26 to clear the fund-raising exercise.
On Thursday, Vodafone Idea’s shares closed up 6.1% at Rs 11.08 on the BSE ahead of the announcement of the fund raise by the company.
Vodafone Idea has been trying to raise up to Rs 25,000 crore for more than a year now and in an analyst call post the December quarter results, its MD and CEO Ravinder Takkar had said that the company expects to complete the fund raise in the current financial year itself.
Vodafone Idea has opted for the government’s four-year moratorium package for payment of spectrum and adjusted gross revenue dues, which provides it a cash flow relief. Additionally, as part of the package, the company has opted to convert the interest on adjusted gross revenue (AGR) and spectrum dues into government equity, which will make the government the largest shareholder in VIL with a stake of 38.5% at the end of the four-year period.
However, it still needs funds to meet the regular licence fee and spectrum charges, vendor payments and enhance capex for better 4G coverage.
The loss-making and financially-constrained company, which is the country’s third-largest telecom operator, has total AGR dues of Rs 58,254 crore of which it has paid Rs 7,854 crore.
Its annual instalments before the government’s relief package amounted to Rs 15,000 crore for spectrum and `9,000 crore for AGR, which came to a total of Rs 96,000 crore for four years.
Vodafone Idea’s net loss widened to Rs 7,234 crore on a quarter-on-quarter basis during the October-December period on the back of higher operating expenses. The company’s revenues during the quarter was up 3.3% on a sequential basis to Rs 9,717 crore.
The company’s total gross debt (excluding lease liabilities and including interest accrued but not due) as of December 31, 2021, stood at Rs 1.9 lakh crore. Its cash balance stood at Rs 1,500 crore.