Vi to allot ATC Rs 1,440 crore fully paid-up equity shares from OCDs

Vodafone Idea will allot equity shares worth ₹1,440 crore from optionally convertible debentures, or OCDs, to ATC Telecom Infrastructure, the loss-making carrier told the Bombay Stock Exchange on Tuesday. ATC will hold 2.9% of the revised shareholding after conversion, the company told Mint.

“As per the terms of the OCDs, on March 18, 2024, ATC has requested VIL for conversion of 14,400 OCDs amounting to ₹1,440 crore into 1.44 billion fully paid-up equity shares of face value of ₹10 each. VIL will take necessary actions to allot the equity shares to ATC pursuant to the conversion of the said OCDs, as per the terms of the OCDs,” the carrier said in the exchange filing.

Vodafone Idea owes significant dues to vendors and tower services providers including ATC and Indus Towers, which the carrier is yet to clear. To be sure, ATC is exiting the Indian market.

The Aditya Birla Group company had issued OCDs amounting to ₹1,600 crore to ATC Telecom Infrastructure Private Ltd (ATC) in October 2022, proceeds of which were used for payments of dues to ATC. The conversion price of ₹10, at the time of OCD issuance, was at a premium to the then prevailing market price of VIL share, the company said.

In August 2023, term of redemption of the first tranche of OCDs amounting to ₹800 crore was extended by 12 months.

The cash-strapped telco which is the third largest by subscribers is in the process of raising ₹45,000 crore including a ₹20,000 crore equity-based fund raise from existing investors.

A shareholder meet for the fund raise is expected to take place on 2 April, post which the operator expects to complete the equity fund raise by the end of the upcoming June quarter.

Following the equity fund raise, Vodafone-Idea will further look to raise the remaining amount as debt.

The carrier has been trying to raise funds since 2020. Funding is critical for Vodafone Idea’s survival and growth in the capital-intensive Indian telecoms space, where rivals Reliance Jio and Bharti Airtel have spent more than ₹1 trillion in rolling out 5G services in the country.

Vodafone Idea is yet to launch 5G services commercially, having bought the requisite spectrum in 2022. It completed the minimum rollout obligation in four circles. The management, which is set to undertake roadshows in Mumbai and Singapore, expects to garner 40% of revenue from the 5G business in 24-to-30 months, the company said in an investors’ presentation last week. LiveMint