Vodafone-Idea Promoters Likely To Make Fresh Investment Into Operations

Vodafone Plc and Aditya Birla Group are likely to invest more in Vodafone-Idea, the merged entity. This update comes a week after the Department of Telecommunication introduced a relief package for telecom operators so that they can operate freely in the country.

The telecom operator has not announced anything on the investment side, but still, sources said that the company is discussing the same. Notably, all lenders of Vodafone-Idea want promoters to invest in the firm and to revive the operations.

According to an ET report promoters of Vodafone-Idea are expected to take all steps to revive operations. Earlier, promoters said to make any fresh investment in the entity. For the unaware, Vodafone Plc has more than 44 percent share in the firm, whereas Aditya Birla Group has only 27.66 percent.

"It's time Vi's promoters infuse some capital and signal their intent to rebuild the company to complement the relief package...such a move would also give potential overseas PE investors the confidence to participate and close Vi's long-pending fundraise that would also help it clear its upcoming financial dues," a person close US private equity investor was quoted by ET.

The report said that bankers believe that the government has already an announcement and now, it's time that telecom operator should announce some measures to build confidence.

In fact, Airtel chairman Sunil Bharti Mittal recently said that he had a word with Vodafone Group CEO to increase their contribution to the firm. "This is really the time for them to contribute their money, their resources, to revive the beleaguered company," he added.

Furthermore, the report claims that lenders of the Vodafone-Idea are discussing the same with promoters of the company and are expected to close the deal by the end of this year. It is worth noting that fundraising has been very challenging for the telecom operator.

The company has been trying its best to raise funds; however, it has failed to do so due to financial issues. In addition, Kumar Mangalam Birla has also resigned from the loss-making entity. But still, we believe that the package announced by the DoT is expected to help all telecom operators, especially Vodafone-Idea.