Industry insiders say Vi’s co-owners – UK’s Vodafone and India’s Aditya Birla Group – have committed to invest over Rs 5,000 crore in the telecom company.
Vodafone Idea Has started fresh talks with large lenders like State Bank of India, Punjab National Bank and HDFC Bank to refinance loans worth Rs 3,000-4,000 crore. In fact, refinancing some of the loans will help Vi clear dues to tower companies like Indus Towers and network component makers like Ericsson and Nokia.
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The pending payments have accelerated the company’s plans to finalize tower site agreements needed to tie up 5G component supply and launch next-gen service. Last year, rival companies Reliance Jio and Bharti Airtel have taken their steps forward by starting 5G service in October. The new talks come soon after Vodafone Idea converted interest earned for AGR dues into government equity. The transaction was completed with effect from 7 February. The government is now the largest shareholder of the company with 33.44 per cent stake.
No possibility of getting new loan
Speaking to The Economic Times, a senior banker said that Vodafone Idea is in fresh talks with lenders seeking to recall some bank loans, they have not yet put forward a formal refinance proposal. Discussions are also going on for relaxation in loan repayment terms. The banker also said that Vi’s lenders are unlikely to extend fresh loans as of now, as this would potentially put pressure on the already weak balance sheet of the loss-making telco, which has 2.2 lakh customers by September 2022. Debt of Rs.crores and finally the cash balance of only Rs.190 crores is included. Another person involved in the process said that refinance proposal can be considered as banks are not giving new loans.
Promoters can invest Rs 5 thousand crore
In September 2023, Vodafone Idea has to repay a loan of Rs 9,600 crore. This may further limit the operator’s capital expenditure capacity, unless existing bank loans are refinanced soon. Industry insiders say Vi’s co-owners – UK’s Vodafone and India’s Aditya Birla Group – have committed to invest over Rs 5,000 crore in the telecom company. Both can also persuade third party investors to take equity. So far no response has come from the company nor the banks.
Source: www.tv9hindi.com”