Vodafone Idea board to meet on February 27 to look at fund-raise

NEW DELHI: The much-awaited fund-raise at Vodafone Idea seems to be happening soon. The debt-laden telco, which has been unable to start work on 5G services, said on Thursday it will consider a fund-raise in a board meeting on Feb 27, which many believe could be the first step towards a “multi-billion-dollar infusion” into the company.
Vodafone Idea has been losing money and customers fast in absence of a credible revival and expansion plan.The announcement comes on a day when industrialist and Aditya Birla Group chairman Kumar Mangalam Birla said “efforts are on to get outside investors” to infuse funds into the telco. On how soon such investors could be on-boarded, he said, “we are making good progress but can’t put in a timeline… We remain very committed to Vodafone Idea,” he said.
Sources said the fund-raise “will be a substantial one”, considering “urgent need” of the company to launch 5G services and pare debt, which is hovering at around Rs 2.2 lakh crore. “The fund infusion will be followed by a bank loan of a near similar amount, which should provide the company enough financial ammunition to work on a revival.”

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Vodafone Idea, where the government holds a majority stake at around 33% (through a share purchase agreement in lieu of interest payouts), on Thursday informed the bourses of its fund-raise plan, which was originally expected around the second half of last year. This got delayed due to various reasons, including differences over valuation after its share prices saw a sudden spurt that is understood to have stalled the talks. However, the differences seem to have been contained.
“Pursuant to applicable regulations of Sebi… we wish to inform you that a meeting of the board of directors of Vodafone Idea will be held on February 27 to consider and evaluate any and all proposals for raising of funds in one or more tranches,” the company said. The fund-raise could be through “a rights issue, further public offer, private placement, including preferential allotment, qualified institutions placement or through any other permissible mode and/or combination thereof as may be considered appropriate,” the company said.
It said fund-raise will be by way of issue of equity shares or through issue of any instruments or securities, including securities convertible into equity shares, GDRs, ADRs or bonds, including foreign currency convertible bonds, convertible debentures, warrants, and/or non-convertible debentures. Vodafone Idea saw its net loss narrow to Rs 6,986 crore for the December 2023 quarter.

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