Vodafone Idea to raise Rs 1,600 crore debt from vendor ATC – Times of India

NEW DELHI: Loss-making telecom operator Vodafone Idea on Friday said it has received board nod to settle Rs 1,600 crore dues to equipment vendor ATC Telecom Infrastructure Ltd by converting the due amount into equity if unpaid in 18 months.
Vodafone Idea (VIL) will raise the amount through equity convertible debt bonds that carry a coupon rate of 11.2 per cent per annum payable every six months during its term.
“The Board of Directors of Vodafone Idea Limited at its meeting held today – October 21, 2022 – has, inter-alia, approved issuance of up to 16,000 Indian Rupee denominated optionally convertible, unsecured, unrated and unlisted debentures (OCD) having a face value of Rs 10,00,000 each, in one or more tranches, aggregating up to Rs 1,600 crores, convertible into equity shares at a conversion price of Rs 10 per equity share, to ATC Telecom Infrastructure Private Limited,” VIL said.
VIL said that the funds raised will be used to pay ATC amounts owed to ATC by the company under the master lease agreements and for general corporate purposes of the company.
The maximum term of OCD is 18 months from the date of issue and allotment of the first tranche of OCDs.
The OCDs provide options to investors to convert the debt into equity in case of non-payment of dues and interest within stipulated timelines.
VIL said that “the preferential issue would be subject to certain conditions precedent, including inter alia the approval of the shareholders of the Company and the Government of India having converted the interest from deferment of Adjusted Gross Revenue and spectrum dues owed by the Company”.
VIL has opted for converting about Rs 16,000 crore of interest liability payable to the government into equity, which will amount to around 33 per cent stake in the company while promoters’ holding will come down from 74.99 per cent to 50 per cent.
The government has given telecom operators an option of paying the interest for four years of deferment on the deferred spectrum instalments and AGR (adjusted gross revenue) dues by way of conversion into equity of the NPV of such interest amount.
The government is yet to convert the debt into equity and is waiting for the share price of VIL to stabilise at Rs 10.
VIL board also approved the convening of an Extraordinary General Meeting of the company on November 21 to seek approval of shareholders for the aforesaid preferential issue.
The company’s total gross debt, excluding lease liabilities and including interest accrued but not due, as of September 30, 2021, stood at Rs 1,94,780 crore.
The amount comprises deferred spectrum payment obligations of Rs 1,08,610 crore, AGR liability of Rs 63,400 crore that is due to the government and debt from banks and financial institutions of Rs 22,770 crore as of January 11, 2022 — when it offered conversion of interest liability into equity.
At the end of the April-June 2022 quarter, VIL’s total gross debt (excluding lease liabilities and including interest accrued but not due) stood at Rs 1,99,080 crore, comprising deferred spectrum payment obligations of Rs 1,16,600 crore, AGR liabilities of Rs 67,270 crore that are due to the government, and debt from banks and financial institutions of Rs 15,200 crore.



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