Vodafone Idea’s board on Thursday approved raising Rs 14,500 crore from its promoters – UK’s Vodafone Group and India’s Aditya Birla Group (ABG) and external investors.

The telco will raise Rs 4,500 crore ($600 million) via a preferential share issue at Rs 13.30 a share to its promoters or its related entities. Of this, the Vodafone Group’s share will be Rs 3,375 crore, or $450 million, which will be paid from funds raised by the partial sale of its stake in Indus Towers, Vodafone Group said in a separate statement.

The board has approved the issue of up to 3,38,34,58,645 equity shares at Rs. 13.30 a share “for an aggregate consideration of up to Rs 4,500 crores to Euro Pacific Securities Ltd and Prime Metals Ltd (Vodafone Group entities and promoters of the Company), and Oriana Investments Pte Ltd (Aditya Birla Group entity forming part of the promoter group) on a preferential basis…,” the cash strapped telco said in a statement Thursday.

The company’s stock ended 6.1% higher at Rs 11.08 on the BSE.

The board also cleared raising another Rs 10,000 crore via equity and debt instruments, the company added.

The telco will issue “…equity shares or securities convertible into equity shares, Global Depository Receipts, American Depository Receipts foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and warrants entitling the warrant holder(s) to apply for equity shares or a combination thereof up to an aggregate amount of Rs. 10,000 crore by way of a private placement, qualified institutions placement or through any other permissible mode in one or more tranches,” Vodafone Idea added in the statement.

The Board also approved the convening of an extraordinary general meeting of the operator on Saturday, March 26, 2022, to approve the fund-raising moves.

In its statement, the Vodafone Group said it had raised Rs 1,420 crore by selling 63.6 million shares, or 2.4%, in Indus Towers at INR 226.84 per share.

It further plans to sell 127.1 million shares, or 4.7%, in Indus to Bharti Airtel for INR224.5763 a share, which will net the UK telecom major under Rs 2,900 crore.

“Vodafone has the option to contribute any residual proceeds from the sale of the primary shares (in Indus) as capital to Vi before July 15, 2022. Any residual proceeds that are not contributed to Vi will be available to Indus until November 19, 2022, to guarantee Vi’s obligations under the Master Services Agreements,” Vodafone Group said.

After selling a 7.1% stake in Indus, Vodafone would retain 567.2 million shares, or 21%, in Indus.

“Vodafone continues to be in discussions with several interested parties in relation to a potential sale of the residual shareholding,” the telco said.

“There is no certainty that an agreement will be reached in relation to such a sale. Indus will continue to have a secondary pledge over the residual shareholding ranking behind the security provided to Vodafone’s existing lenders for the EUR1.4 billion loan utilised to fund Vodafone’s contribution to the Vi rights issue in 2019,” Vodafone Group said.


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