Vodafone Idea Raises Rs 5000 Crore from Banks to Pay NCD Instalments

The short-term loan taken by the company is expected to be cleared within one year and the interest due on that should come around 6.5% to 8.5%, depending on the individual banks.

Highlights

  • Vodafone Idea has reportedly raised Rs 5000 crore as a short-term loan from the banks.
  • The telco is talking with the global investors and has been trying to raise funds through equity for a long-time.
  • The government is said to have the largest share amongst all the promoters after the equity conversion.

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Vodafone Idea

Vodafone Idea (Vi), the joint venture between the Vodafone Group Plc and the Aditya Birla Group, has reportedly raised Rs 5000 crore as a short-term loan from the banks including HDFC Bank, IDFC Bank, the State Bank of India (SBI), Union Bank of India, and IndusInd. The telco has to pay two dues in two instalments to the non-convertible debenture (NCD) holders by February 2022. According to an ET Telecom report, the total amount due is Rs 4500 crore, out of which Vi will pay Rs 1,500 crore in early January 2022, while the remaining Rs 3000 crore will pay paid in February 2022.




Vodafone Idea Likely to Pay 6.5% to 8.5% Interest on the Loan

The short-term loan taken by the company is expected to be cleared within one year, and the interest due on that should come around 6.5% to 8.5%, depending on the individual banks. Vodafone Idea is also looking to raise funds through equity, and this money could be utilised to pay off this short-term loan to the bank.

The telco is talking with global investors and has been trying to raise funds through equity for a long-time. Further, in an interesting development, Vodafone Idea’s board has accepted the conversion of interest dues related to spectrum instalments and other spectrum dues into equity for the government.

This is a surprising move from the telco as it had a better cash flow with the moratorium on payments, and with expected fundraise in the future, it could have paid off the dues. The government is said to have the largest share amongst all the promoters after the equity conversion.

The Indian government will own about 35.8% of the company, while Vodafone Group and the Aditya Birla Group will own 28.5% and 17.8% stake in the telco, respectively. How will this affect the telco's business is something that we will have to wait and see.

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