Vodafone Idea: Aditya Birla Group is looking to raise funds to invest in Vodafone Idea Limited (VI) by issuing equity shares. They are in discussions with global banks to obtain a term loan for the preferential allotment of shares. The Indian government’s decision to convert a debt of INR 16,133 crore into equity will be used by promoters to infuse INR 5,000 crore in Vi.
Relief Plan for Vodafone Idea
There is no clear information on how much Vodafone Group PLC will invest, but they may sell their remaining 21.05% stake in Indus Towers for investment. The promoters are also seeking to bring in third long-term investors. A senior banker suggests that issuing equity through preferential allotment is likely.
Aditya Birla Group’s promoter entities have previously borrowed loans for three to five years from foreign banks to invest in the company’s equity. The three companies involved in this deal have not provided any answers.
Stakes in Vodafone Idea
Following equity conversion, the Indian government’s stake in Vodafone Idea is 33.1%, with Aditya Birla Group and Vodafone owning 32% and 18%, respectively. As of March 31, 2022, VI’s net worth was negative INR 61,965 crores, with a gross debt of INR 2.2 lakh crores causing concern for the company. In the first nine months of the current financial year, Vi incurred a net loss of INR 22,882 crores.
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