Vodafone Idea (Vi), a prominent Indian telecom operator, needs to raise funds fast in order to pay debt in the short term. The company needs to pay Rs 4300 crore in debt and 5G airwave instalments in the September quarter. According to an ET Telecom report, IIFL Securities said that the short-term cash outgo of Rs 4300 crore is going to affect Vi's ability to make payments to Indus Towers. Out of Rs 4300 crore, Rs 2600 crore is towards debt payment, while Rs 1700 crore is for 5G spectrum payment.
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During the second quarter, there is also the redemption of Rs 800 crore (a part of the Rs 1600 crore OCD issued to ATC). Vodafone Idea can skip payment to ATC (American Tower Company), and then ATC will have the option to convert the OCDs into equity in the company. If ATC converts the OCDs into equity, then that equity would be freely tradable in the open market, post one year anniversary from the date of issuance of the OCDs.
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If Vodafone Idea (Vi) doesn't manage to raise funds in the short term, it would find it difficult to make all the payments. Vi has dues of approximately Rs 9500 crore towards Indus Towers. The Indian tower company has urged the ailing telco to clear the massive amount of dues. Vi had earlier said that it would make the payments to Indus Towers between January and July 2023 but now has cited fresh challenges in being able to clear the previous dues till the date of December 31, 2022.
The report said that Vi needs to raise funds to the tune of Rs 50000 crore to expand 4G and also finance the 5G rollout along with being able to pay the dues to vendors and the banks. Until the time promoters infuse more capital, others are wary of giving Vi their money.
