The Board has approved a proposal to raise up to Rs 1,600 crore from ATC Telecom Infrastructure, said Vodafone Idea announced on Friday in a regulatory filing. “The Board of Directors of Vodafone Idea Limited at its meeting held today – October 21, 2022 – has, inter-alia, approved issuance of up to 16,000 Indian Rupee denominated optionally convertible, unsecured, unrated and unlisted debentures having a face value of Rs 10,00,000 each, in one or more tranches, aggregating up to Rs 1,600 crores, convertible into equity shares at a conversion price of Rs 10 per equity share, to ATC Telecom Infrastructure Private Limited,” VIL said.
The optionally convertible, unlisted, unsecured and unrated debentures (OCDs) will carry a coupon rate of 11.2 per cent per annum, payable semi-annually during its term. “Maximum OCD term of eighteen (18) months from the date of issue and allotment of the first tranche of OCDs,” the filing said.
The telco continues to be deep in trouble. The company’s efforts to raise ₹20,000 crore as a mixture of debt and equity remains unfulfilled. In May, the then CEO Ravinder Takkar had said that the company was on the verge of closing a significant round of fundraising, intending to raise ₹10,000 crore through equity and the remaining amount through debt.
While the DoT debt has increased because of accrual of interest, the debt from banks and financial institutions has reduced by Rs. 28.8 billion in the quarter. The cash and cash equivalents were at Rs. 8.6 million. As a result, net debt at the end of the quarter stood at Rs. 1,982.2 billion. Banks have made it clear that it will give VIL new loans for its 5G roll-out only after the equity conversion. The two major shareholders — the Birla group and Vodafone plc — have not helped matters by paying a negligible Rs 4,500 crore to cover the debt.
Last month, Indus Towers had warned the company of service closure over non-payment of dues. Vi is encountering similar troubles with Nokia as well, wherein they are unable to clear dues. The overdues are estimated at Rs 7,000 crore-8,000 crore.
TRAI’s recent release revealed that VI was the only telco that lost subscribers. Its active subscriber base fell in August by 2.6 million, Jio and Airtel collectively rose by 4 million. VI had the lowest VLR among private sector players. At 84.7 per cent in August, VIL’s VLR has been falling continuously from September 2021, compared to 98.3 per cent for Airtel and 91.8 per cent for Jio (also in August). Vi lost 2 million net subscribers in August over the previous month, Jio added 3.3 million, and Airtel 0.3 million.
5G. Jio and Airtel have placed orders on Nokia, Ericsson and Samsung, Vi so far is silent. The two telcos have also launched 5G services in select cities and revealed their further plans, there is no news announcements from Vi.
The telco has so many mountains to climb ahead!