Months after handing out the majority ownership to the government in lieu of statutory interest payments, beleaguered Vodafone Idea announced a fund-raise running up to £1.45 billion, possibly to finance network and business expansion.
The mop-up, approved by the company’s board, includes fund infusion by its private promoters - British telecom company Vodafone Plc and India’s Aditya Birla Group - who would chip in with a total of £450 million as they purchase 3.38 billion equity shares (of face value of Rs 10 each) at an issue price of Rs 13. 30 per share.
The fresh promoter shares will be issued to Euro Pacific Securities and Prime Metals (Vodafone Group entities), and Oriana Investments (Aditya Birla Group entity) on a preferential basis. For the remaining £1 billion, the board approved issuance of equity shares or securities convertible into equity shares, among other instruments.
The fund-raise comes amid plans to improve financial strength, especially as it carries a debt of £19.7 billion. While the company was the biggest beneficiary of the government bailout announced in September, it desperately needs fresh fund infusion to strengthen its network, while preparing for 5G auctions. In the third quarter, the company had reported widening of its consolidated loss to £723.1 million. Against this, it had posted a loss £453.2 million in year-ago period.
