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Govt support reinvigorates investor-interest

Vodafone Idea is aiming to conclude its fund-raising exercise this fiscal year. During the company’s earnings call on Monday, Vodafone Idea MD & CEO Ravinder Takkar said that “all these reforms are seen very positively by investors, and these announcements (Vi’s earlier announcement to convert its ₹16,000 crore debt to equity) have provided clarity on govt’s intent to maintain a healthy market structure.”

Takkar said the announcements and the subsequent actions have bought much needed clarity regarding the way the government is looking at the telecom sector. Government of India’s clarification that Voda Idea will continue to operate as a private entity, despite the government’s 36 per cent stake post conversion of equity will also be helpful during fund-raising talks, according to Takkar. Takkar maintains that investor interest has been renewed. “We will make suitable disclosures regarding fundraising when appropriate, and we target to conclude the exercise this fiscal year” said Takkar.

“We have opted for deferment of spectrum and AGR dues for the next few years, as well as conversion of interest arising from such deferment into equity; we, therefore, have no government dues payable to the government pertaining to spectrum and AGR except for spectrum payments for March 2021,” said Akshay Moondra, Chief Financial Officer for Vodafone Idea. Moondra also said that Vi is in talks with investors and banks for potential fund-raising.

Moondra also said that Vi expects to receive a total of ₹17,000 crore worth of bank guarantees from the government, some of which they have already received. Moondra said that the subsequent reduced exposure of Vi to the banks as a result will also help in the fund-raising efforts. “We are expecting, based on this bank guarantee reduction, and bank exposure going down by this extent, we should be able to substitute it with new facilities…..so, we are expecting the entire return of bank guarantees should become available to us in the form of new funding.”

These statements come after Vodafone Idea announced on January 11 that it will be availing the option of converting its spectrum and AGR dues owed to the government into equity. The Hindu BusinessLine

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