Vodafone Idea is facing another major hurdle as its fundraising talks with foreign lenders' consortium led by Oak Hill Advisors hit a roadblock. A new report now says Vi's massive $2 billion fundraising plan is now uncertain following differences between key consortium members. An ET Telecom report says the talks have not fallen through entirely, however, the struggling telecom operator is already exploring new partners for a fundraise. The fundraise talks between Vi and the foreign lenders' consortium was supposed to end on January 31. But it was extended till February 28. Late last month, GoldenTree exited the consortium.
Vi and Consortium Members Face Key Differences During Fundraise Talks
For the unaware, Vodafone Idea was looking to raise Rs 14,600 crore or $2 billion through equity funding. When we last reported regarding this topic on February 10, the consortium members were hesitant in closing the deal but they sought some safeguards and business milestones from the struggling telecom operator. The consortium that is led by Oak Hill also includes GoldenTree Asset Management, Pacific Investment Management Co, Sixth Street, Twin Point Capital and Varde Partners. As noted, GoldenTree Asset Management chose to exit the consortium at the end of February.
The latest report says Vodafone Idea's management and the consortium members such as Oak Hill and Varde Partners had some differences during the talks. The differences occurred over "funding terms and furnishing of guarantees in case of payment defaults." ET Telecom managed to grab this information from people aware of the matter.
That being said, the talks are not completely fallen off between the parties. To be on the safe side, Vi is already exploring other partners for possible fundraising.
Vodafone Idea is possibly the worst positioned telecom operator right now and the telco must have pinned a lot of hopes on this fundraising. Thankfully, the telco did not have to take any major participation at the Spectrum Auction 2021. Vi grabbed just 11.8 MHz (mostly in the 1800 MHz band) and said its intentions of launching 5G services at the earliest.