Vi extends OCD redemption to ATC by 18 months

Shares of Vodafone Idea Ltd. are in focus today after the company, along with ATC, agreed to extend the period of redemption of 8,000 Optionally Convertible Debentures (OCDs).

The timeline has been extended from six months from the date of allotment of the first tranche of OCDs to 18 months from the date of allotment.

Monday, August 28, was the due date for allotment of the first tranche of these 8,000 OCDs. The push in the timeline is subject to certain conditions as mutually agreed.

Vodafone Idea’s shareholders had approved the preferential issue to raise up to Rs 1,600 crore through Optionally Convertible Debentures through vendor American Tower Corp (ATC).

Optionally convertible debentures are debt securities that allow an issuer to raise capital and in return, the issuer pays interest to the investor till the maturity.

The telco had earlier said that the proceeds from the issue funds would be used to pay amounts owed to ATC India under the master lease agreements and the remaining amount shall be used for general corporate purposes.

Vodafone Idea’s board had in January given approval for the allotment of Optionally convertible, unsecured, unrated and unlisted debentures worth Rs 1,600 crore to ATC Telecom Infrastructure Pvt. Ltd.

Shares of Vodafone Idea had ended nearly 10 percent higher on Friday, marking its best single-day performance in nearly two months. This was the fourth straight day of gains for the telecom operator.

Sources within the dealing rooms told CNBC-TV18 that the stock saw strong flows on FII desks with a European fund being an active buyer in the stock.

In its earnings call last week, the company’s management said that its equity fundraising exercise will conclude in the December quarter and debt funding will follow. The management said that fundraising discussions have gathered steam over the last 1-2 months.

It also expects the payout burden to ease significantly after bunched-up debt repayments and spectrum payouts in the September quarter. CNBCTV18