Promoters Vodafone Group Plc and the Aditya Birla Group (ABG) are likely to invest $400 million as fresh equity to aid the financially fragile telecom operator Vodafone Idea.
Vodafone and ABG, who own 44.39% and 27.66% respectively in Vi, may inject $200 million to retain their stakes in the telco once it raises funds from external investors.
This comes after Vodafone Idea’s board approved a plan to raise Rs 25,000 crore from external investors in September 2021. “Kumar Mangalam Birla is expected to invest the amount via unlisted promoter entities, and none of the group’s listed companies will invest," a source said.
On September 15 the Union Cabinet announced a relief package for the telecom sector, including a four-year moratorium on AGR and spectrum payments, reduced bank guarantees, and the option to convert statutory dues to government equity.
The relief package has eased out Vodafone Idea’s immediate cash flow burden and may raise interest in investors, according to industry experts.
The payment moratorium itself will allow the telco to save around Rs 1 lakh crore annually, they added. Before the package was announced, ABG and the Vodafone Group had refused to put fresh equity into the telco.
Kumar Mangalam Birla may inject some of his own capital into Vodafone Idea while UK’s Vodafone Group may sell at least a part of its stake in tower firm - Indus Towers - and channel the proceeds into the loss-making telco. This will be followed by external funding.
#VodafoneIdea #TelecomRelief #AdityaBirlaGroup
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