In the further development of events, the shareholders of Vodafone Idea have cleared the previously raised proposal of raising Rs 14,500 crore. The news of the approval was informed by the cash-strapped telecom operator on Saturday during a filing. VIL had earlier raised the proposal to raise Rs 14,500 crore from its primary promoters – UK’s Vodafone Group as well as Aditya Birla Group (ABG) along with other external investors. Let’s find out more.
What was the Proposal?
A couple of weeks ago, the board of VIL announced the proposal set to raise Rs 4,500 crore, which is approximately $600 million through preferential shares issued at Rs 13.30 per share to its promoters as well as related companies. Out of the said Rs 4,500 crore, Vodafone Idea will have a share of Rs 3,375 crore, which is nearly $450 million, which the company will pay via the funds it raised by the recent selling of its stake in Indus Towers. Aditya Birla Group is reportedly going to put in Rs 1,125 crore.
The telco, which is going through a financial crisis, stated that the board has approved to issue 3,38,34,58,645 equity shares at Rs 13.30 each making a cumulative Rs 4,500 crore to Euro Pacific Securities Ltd and Prime Metals Ltd. as both are Vodafone Group entities as well as promoters of the company and Oriana Investments Pvt. Ltd. which is an Aditya Birla Group Entity, on a preferential basis.
Vodafone Idea had also informed that the telecom operator would issue equity shares or securities convertible into equity shares, Global Depository Receipts, American Depository Receipts foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and warrants. This will allow warrant holders to apply for equity shares up to a cumulative amount of Rs 10,000 crore via private placement, qualified institutions placement or through any other permissible mode in one or more tranches as the telco announced another Rs 10,000 crore via equity and debt instruments.
Telecom operators, particularly, Vodafone Idea, got a bit of relief as the government announced a blockbuster relief package that included a four-year break for companies from paying statutory dues along with permission to share scarce airwaves and 100% foreign investment through the automatic route.