According to a source, cellphone operator Vodafone Idea has reopened negotiations with important lenders State Bank of India, Punjab National Bank, and HDFC Bank to refinance loans totaling between 3,000 and 4,000 crore.
According to the article, refinancing a portion of the debt will assist Vodafone Idea free up money because the company has a lot of vendor debt to settle with companies like Indus Towers manufacture towers and Ericsson and Nokia that provide network equipment.
Indus Towers made a provision for the questionable debt of 2,298.1 crore last month in January due to VIL’s shaky balance sheet. It is in the process of issuing optionally convertible debentures worth up to Rs. 1,600 crores to vendor American Tower Corporation to settle its debts.
Due to the challenging market environment and significant debt on its balance sheet, VIL tried multiple times to obtain money from investors but was unsuccessful in each attempt.
The government received equity shares valued at 16,133 crores last week after Vodafone Idea authorized their allocation, making the government the company’s largest shareholder with a 33.44 percent stake.
The company stated in a regulatory filing that the shares were given to the government in lieu of conversion of interest dues resulting from the postponement of payments for spectrum auctions and adjusted gross revenue.
The filing states, “it is hereby informed that the board of directors of the company has, at its meeting held today, approved the allotment of 16,133,198,899 equity shares of the face value of 10 each at an issue price of 10 per equity share, aggregating to 161,331,848,990 to the Department of Investment and Public Asset Management, Government of India.
After receiving a definite commitment from Aditya Birla Group to run the company and bring in the necessary investment, the government has allowed the conversion of the debt-ridden Vodafone Idea’s interest dues of 16,133 crore into equity.
After the government permitted the carrier to convert the $2 billion interest on debts owing to the sovereign into equity, which could provide some cash flows in the near future, shares of Vodafone Idea Ltd increased by about 25% on February 6.
Previously in 2021, India had approved a bailout package for the insolvent telecom companies, enabling them to convert interest on postponed adjusted gross revenue owed to the government into equity.
The mobile carrier previously announced that VIL would exercise that option and issue 1,613 crore shares worth $10 each for a total of 16,133 crore.
In order to combat the fierce price battle started by billionaire Mukesh Ambani’s wireless company Reliance Jio, Britain’s Vodafone Group and India’s Idea Cellular launched the joint venture known as Vodafone Idea.
VIL’s shares ended Friday’s trading session at 7.88 rupees per share, up 0.13 percent from the previous closing on the BSE.