Vodafone Idea Counting on SBI Capital Markets for Raising and Restructuring Loan

The cash-strapped telco is trying to come up with a comprehensive restructuring plan which will include recasting of the loans and getting a longer tenure to repay with lower interest rates. The move from Vodafone Idea is its effort in raising capital as there has been no luck with getting a new investor onboard or getting any help from the promoters.

Highlights

  • Vodafone Idea has reportedly appointed SBI Capital Markets last week for negotiating the restructuring of its current loan.
  • Vodafone Idea is also considering the sale of overseas convertible bonds for raising $750 million to $1 billion.
  • Vodafone Idea has to secure capital in one way or another so that the telco can justify another tariff hike with an improved 4G network.

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Vodafone Idea

Vodafone Idea has reportedly appointed SBI Capital Markets last week for negotiating the restructuring of its current loan. The telco’s loan is worth around Rs 20,000-23,000 crore today which needs to be paid in the next four years. Not just the restructuring, but SBI Capital Markets will also help Vodafone Idea in raising fresh loans. This loan will allow the telco in raising capex levels so that it could expand 4G fast to compete for head-on with Reliance Jio and Bharti Airtel, reports ET Telecom.

Vodafone Idea Aiming to Get Longer Tenure for Loans at Lower Interest Rates

The cash-strapped telco is trying to come up with a comprehensive restructuring plan which will include recasting of the loans and getting a longer tenure to repay with lower interest rates. The move from Vodafone Idea is its effort in raising capital as there has been no luck with getting a new investor on board or getting any help from the promoters.

Vodafone Idea was also considering the sale of overseas convertible bonds for raising $750 million to $1 billion. It should have been done within the first week of February only but has now been pushed ahead by a few weeks.

The telco has also been in talks with private equity investors such as Apollo Global Management and Carlyle for raising up to another $1 billion. Whatever Vodafone Idea (Vi) is planning, it should happen fast as the telco’s users are leaving the network in huge numbers every quarter that goes by.

Vodafone Idea has to secure capital in one way or another so that the telco can justify another tariff hike with an improved 4G network.

SBI Capital Markets will be negotiating with the banks on behalf of Vodafone Idea and will try to restructure the existing loans along with trying to secure a loan from the financial institutions in the near future. Hopefully, something good comes out of all this for Vodafone Idea before the end of FY22.

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