As per industry sources, Vodafone Idea (Vi) has assured lenders that it expects to conclude its fundraising process of about Rs 75 billion by the end of June 2021 and that it won’t default on any upcoming payments.
Earlier in September 2020, Vi had announced plans to raise Rs 250 billion. However, analysts have expressed concerns over Vi’s Rs 250 billion fundraising plan, given that the telco hasn’t been able to conclude any deals after talking to potential investors such as an Oak Hill-led consortium, US private equity firms including KKR, besides Canada Pension Plan Investment Board, Caisse de Dépôt et Placement du Québec and Norway’s Government Pension Fund Global.
As per industry experts, fundraising has been a challenge for Vi considering its weak financial performance and rapid loss of users. Prospective investors want the co-promoters – the UK’s Vodafone Plc and the Aditya Birla Group – to also infuse capital. However, both promoters have stuck to their stance not to put in additional equity in the loss-making telco.
That said, Vi’s local lenders still appear keen to give the telco more time because it has until FY23 before it starts paying annual spectrum-related instalments.
Vi’s local lenders include State Bank of India, Punjab National Bank, IndusInd Bank, ICICI Bank, Yes Bank, IDFC Bank, ICICI Bank and HDFC Bank.
On a related note, one of Vi’s domestic lenders, a large public-sector bank, recently extended a bank guarantee for about Rs 14.2 billion by another year, which the telco plans to use to clear its remaining dues to the government for 4G spectrum acquired in March 2021. Vi bought 4G airwaves worth Rs 19.93 billion and paid Rs 5.74 billion upfront.
