Vodafone Idea To Consider Fundraise Next Week As KM Birla Hunts For New Investors
The Aditya Birla Group Chairman said there are no plans to exit the struggling telecom business and it will continue to look for new investors in Vodafone Idea.
Vodafone Idea Ltd. said it plans to consider a fundraising proposal through multiple instruments in a board meeting next week, even as billionaire Kumar Mangalam Birla keeps the hunt on for new investors.
The board will evaluate proposals for the capital raise on Feb. 27 in one or more tranches by way of a rights issue, further public offer, private placement, including preferential allotment, or qualified institutional placement, according to an exchange filing on Thursday.
Speaking at the launch of Grasim Industries Ltd.'s new paint business, the Aditya Birla Group Chairman said there are no plans to exit the struggling telecom business and it will continue to look for new investors in Vodafone Idea.
"We are making good progress, but we can't put in a timeline," Birla told mediapersons. "We remain very committed to Vodafone Idea and like we have said in the public domain, efforts are on to get outside investors," he said.
The U.K.'s Vodafone Group Plc owns 18.1% of Vodafone Idea, while the Aditya Birla Group holds a 32.3% stake.
Debt Woes, 5G Goals
Fresh funds will be used for new capex and the generation received from operations minus the old-debt servicing will be used to pay the vendors, Chief Executive Officer Akshaya Moondra said in an earnings conference call last month.
The company will prioritise payment of vendor dues, even as it plans to roll out 5G in the next six to seven months, he said. Its competitors, Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd., have already rolled out 5G but the technology is yet to be monetised.
The debt-laden company has Rs 5,400 crore dues payable by the end of March 2025. Of this, Rs 533 crore is the principal payment for spectrum, while Rs 3,200 crore is debt from banks and financial institutions.
The total gross debt, excluding lease liabilities and including interest accrued, stood at Rs 2.14 lakh crore as of Dec. 31.
Funding will be crucial for Vodafone Idea to meet these obligations and for the rollout of 5G.
The company's third quarter revenue was down 0.4% sequentially to Rs 10,670.8 crore, while net loss contracted to Rs 6,985.9 crore from Rs 8,737.9 crore.
Shares have rallied nearly 11% since the results were announced on Jan. 29.
Vodafone Idea lost 13.68 lakh wireless subscribers, as compared with a loss of 10.73 lakh subscribers in November, according to recent data released by the Telecom Regulatory Authority of India.
Shares of Vodafone Idea closed 6.19% higher at Rs 16.30 apiece on Thursday, as compared with a 0.74% gain in the benchmark NSE Nifty 50.
