Vodafone Idea Lenders Don’t Feel the Weight of Promoters Trust in the Telco

Vodafone Idea (Vi) has been trying to raise funds via debt and equity instruments for quite some time now. In a recent meeting with the lenders, Vi tried to raise funds via debt from its lenders. However, the banks led by the State Bank of India (SBI) told the telco that its promoters need to pitch in with more capital to show that they have confidence in the company. According to an ET report, the lenders feel that the Rs 2000 crore equity infusion in the company is not good enough.

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The telco’s poor credit rating makes it difficult for the lenders to give further debt when the promoters aren’t willing to dip their legs further. Recently, there were reports saying that Vi is very close to raising funds, but that hasn’t happened yet. Vi has two promoters – Aditya Birla Group (ABG) and the Vodafone Group UK.

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Out of the two promoters, Vodafone Group seems to have completely lost confidence in the ability of Vi to make a return. The telecom giant, earlier this year, announced that it will be carrying forward the value of Vodafone Idea as nil on its books. The Indian government is also eagerly waiting for Vi to raise funds. However, since the promoters aren’t willing to do much, it becomes hard for the lenders to show any trust in the company and provide further debt.