The company Vodafone Idea Ltd. released a statement that the government of India will be having a share in its company with an extent of up to 36%. Vodafone Idea is India’s third-largest wireless phone operator company. The decision to have the government owning some stakes in the company came after the board approved the conversion of dues into equity.
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This will lead to dilution of all the current shareholders of the organization, which also includes the founders, stated the unprofitable wireless carrier company in its stock exchange filing. Vodafone Group Plc will have ownership of around 28.5% and Aditya Birla Group will have ownership of about 17.8% in the company.
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The financial rescue plan is essential for the company Vodafone Idea, which is a joint venture between the Vodafone Group and billionaire Kumar Mangalam Birla’s company. Vodafone Idea has been losing out customers recently to larger competitors and rivals. It can be noted that after Reliance Jio Infocomm Ltd. launched its various internet and mobile calling plans, the Vodafone Idea had to face a huge setback in its share in the market.
Vodafone Idea has completed the funds raising of an estimated Rs. 5,000 crore through short-term loans from a group of lenders. This is led by the State Bank of India, Union Bank of India, HDFC Bank, and IDFC Bank, among others. The telecom company plans to utilize the cash for Rs. 4,500 crores of pay-outs towards the deliverance of non-convertible debentures (NCDs) that are due by February 2022. In the recent annual report, Vi has revealed how it plans to clear its remaining amount of Rs. 3,000 crore through January-February 2022. The company is also planning to remove off these debts with the profits of its most-awaited equity-based fundraising that will complete by end of this fiscal year in March.
