Vi shareholders approves Rs 2458 cr preferential issue to Nokia, Ericsson
Vodafone Idea (Vi) shareholders have approved the issuing of preferential shares worth Rs 2,458 crore to long-term vendors Nokia and Ericsson, Vi said in a regulatory filing on Thursday. The move to offer a stake is a bid by the financially beleaguered telecommunications (telecom) operator to partially clear outstanding dues owed to the two telecom gear makers.
The decision by the Vi board to offer 1,027 million equity shares with a face value of Rs 10 each to Nokia and 633.7 million shares to Ericsson was put to a shareholder vote at an extraordinary general meeting of the company on Wednesday.
After this preferential issuance, the shareholding of Nokia and Ericsson in the company will be 1.5 per cent and 0.9 per cent, respectively, Vi had said. The combined stake owned by promoters Aditya Birla Group and Vodafone Plc will stand at 37.3 per cent, while the Centre will hold 23.2 per cent, with the remaining 37.1 per cent being public shareholding.
Apart from easing vendors’ concerns over pending payments, the move may also secure support from the two global telecom equipment giants to help Vi expand its 4G coverage more rapidly, the telco indicated.
The expansion of 4G coverage, including establishing more towers in the sub-gigahertz segment, capacity growth, and the 5G rollout, are the telco’s primary goals. Vi has positioned the preferential issue as a move to bolster the company’s capital expenditure (capex) rollout.
With this equity issuance, Vi has raised Rs 24,000 crore of equity, including the conversion of 1,440 optionally convertible debentures (OCDs) in March 2024 by ATC India (of 1,600 OCDs issued), a follow-on public offer issue in April 2024, and a preferential issue to promoters in May 2024. Additionally, in line with its stated fundraising road map, the company is in active discussions with its lenders to raise debt funding to the tune of Rs 25,000 crore.
As of the end of March, Vi had a total subscriber base of 219 million and had prioritised 4G coverage expansion over 5G, unlike rivals Reliance Jio and Bharti Airtel, who have launched 5G.
First Published: Jul 11 2024 | 7:20 PM IST