Telecom major Vodafone Idea is in talks with Brookfield Asset Management to sell its optic fibre business. It is also in talks with Edelweiss Group for the sale of its data centre located at Navi Mumbai. The Economic Times reported.
For sale of its 156,000 km optic fibre business, a few other suitors are in talks with the company, the report stated.
Diversified financial services company Edelweiss is looking to acquire the data centre through one of its alternative investment funds – Edelweiss Yield Plus Fund, the publication quoted a source as saying.
The fibre network business is valued at $1.5-2 billion and the data centre between $60 million to $100 million, bankers told the newspaper.
Moneycontrol could not independently verify the report.
This development must be seen in the backdrop of the October 24 Supreme Court ruling, which upheld the government’s definition of adjusted gross revenue (AGR) for telcos to include revenue from non-core activities. The liability for Vodafone Idea, which works out to over Rs 53,000 crore, has to be paid within three months.
“What the company receives from the sale of assets will determine the balance that it may need to raise from the capital markets to pay off the AGR dues and capex needs,” the article quotes a source as saying.
However, bankers warn that the sale of its optic fibre assets could be a challenge given the sector’s debt burden of over Rs 7 lakh crore, the report said.
Agreeing that valuations may be a concern in the current backdrop, a company executive admitted to the financial daily that “efforts are being made to assess how much money it could fetch.”
Fundraising plansIn related news, the company is said to have appointed bankers to assess the incremental funds needed to meet its AGR dues and its capital expenditure plans. “Separate bankers are working out the quantum for which the company would need to hit the capital markets taking the sale proceeds into account,” the executive said. – Money Control
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