Vi Shareholders Again Approve OCD Issuance worth Rs 1600 Crore to ATC

Reported by Tanuja K February 26th, 2023 at 05:34 pm

Post the issuance of OCDs to ATC, the promoters will hold 48.76% out of which 31.27% is held by the Vodafone Group UK, and the remaining 17.49% is with the Aditya Birla Group (ABG). The government's shareholding in the telco would come down to 32.09% (still the largest stakeholder in the company). ATC would be holding 3.18% in Vi, assuming full conversion of the OCDs issued.

Highlights

In an EGM of Vi, the shareholders have approved the approval of Rs 1600 crore worth of OCDs to the American Tower Company (ATC).
Post the issuance of OCDs to ATC, the promoters will hold 48.76%.
This would reduce some pressure on the operations of Vi in the short term.

Vodafone Idea

In an Extraordinary General Meeting (EGM) of Vodafone Idea (Vi), the third-largest telecom company in India, the shareholders have approved the approval of Rs 1600 crore worth of optionally convertible debentures (OCDs) to the American Tower Company (ATC). This is not the first time the shareholders have approved the move. Vi couldn't go ahead with the same earlier because one of the conditions for the OCD issue to ATC was the execution of conversion of government dues to equity in the telco. Since it has happened now, ATC would be receiving the OCDs.

Post the issuance of OCDs to ATC, the promoters will hold 48.76%, out of which 31.27% is held by the Vodafone Group UK, and the remaining 17.49% is with the Aditya Birla Group (ABG). The government's shareholding in the telco would come down to 32.09% (still the largest stakeholder in the company). ATC would be holding 3.18% in Vi, assuming full conversion of the OCDs issued.

This would reduce some pressure on the operations of Vi in the short term. The telco is looking to raise funds post the conversion of dues to equity for the government. If the telco is able to raise funds successfully, it would be able to meet the upcoming dues payments as well as fuel the rollout of 5G. While ATC's dues are not going to be a problem anymore, Vi still has to make payments to tower companies such as Indus Towers, and then there are equipment makers such as Nokia.

The promoters are reportedly thinking of giving the telco about Rs 5000 crore, but nothing's confirmed at the moment. The ABG had promised the government that it would be bringing the necessary investments in Vodafone Idea. According to the union telecom minister Ashwini Vaishnaw, this was what pushed the government to go ahead with the dues to equity conversion.