Vodafone Idea plans to clear Rs 1,500 cr debt to Nokia by December 2025
Nokia Solutions and Networks India, a unit of Nokia, now holds a 1.47% stake in the telco following the equity share allotment
Vodafone Idea (Vi) plans to settle its outstanding legacy operational dues to Finland’s Nokia, totalling around Rs 1,500 crore, through multiple cash instalments by December 2025, according to a report by The Economic Times.
The report quoted a source as saying, “But the Finnish vendor is yet to accept the proposal.”
The loss-making telecommunications company recently issued 1,027 million equity shares to Nokia through a preferential issue, thereby settling approximately half (Rs 1,520 crore) of its debt to the network solutions provider.
According to Vi’s latest shareholding structure filing dated July 19, Nokia Solutions and Networks India, a unit of Nokia, now holds a 1.47 per cent stake in the telco following the equity share allotment. Prior to this preferential share issuance, Vi’s total debt to Nokia was about Rs 3,000 crore.
Despite delays in settling vendor payments, the financially struggling Indian telecom company remains optimistic that operational creditors like Nokia will continue to provide support, the report said.
The upcoming expansion of Vi’s 4G networks and new 5G rollouts are crucial for European network vendors Nokia and Ericsson, which have experienced significant revenue declines due to India’s leading telcos, Reliance Jio and Bharti Airtel, reducing their FY25 network capex after completing their nationwide 5G rollouts.
Last month, Vi’s chief financial officer, Murthy GVAS, assured JP Morgan analysts that vendor negotiations would remain unaffected despite the payment issues. The telecom company has been negotiating with Nokia, Ericsson, and Samsung to procure equipment for its 4G network expansion and 5G service rollout, the report added.
The joint venture between the UK’s Vodafone Plc and the Aditya Birla Group recently raised around Rs 23,000 crore in equity financing. It is now seeking to secure an additional Rs 23,000-Rs 25,000 crore through term loans from an SBI-led banking consortium, along with another Rs 10,000 crore via non-fund-based facilities, the report stated.
First Published: Jul 29 2024 | 9:37 AM IST