Vodafone-Idea To Clear All Upcoming Payments; Plans To Raise $1 Billion By June End

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Vi (Vodafone-Idea) has assured its lenders that it will complete its fundraising procedure by the end of June. The telecom operator said it plans to raise $1 billion (close to Rs. 7,500 crores) by June end and will likely clear all upcoming payments.

 

Vi To Clear All Payments; Plans To Raise $1 Billion By June End

This update comes after one domestic lender of the telecom operator approved its bank guarantee for one year. Notably, the bank approves a guarantee of Rs. 1,420 crores for one year. The whole amount will be used in the 4G spectrum that was purchased in March this year. Vodafone-Idea bought 4G airwaves of Rs. 1,993.4 crores.

Why Is Vodafone-Idea Facing Issues During Fundraising?

Vi is under a deep financial crisis as the telco has to clear all dues, including AGR and the remaining spectrum fees, which is why the financial books are not that good or strong. In fact, the company is losing customers every quarter, whereas Airtel and Reliance Jio are adding customers.

Notably, Vi was planning to raise Rs. 25,000 crores in September last year; however, the deal got canceled. Earlier, the company was planning to join hands with KKR, Canada Pension Plan Investment Board, Government Pension Fund Global, and Oak-Hill-led consortium.

Besides, all investors want co-promoters (Vodafone Plc and Aditya Birla Group) to invest money in the entity; however, both have refused to add more capital in the operations. This is the main reason why it is a big challenge for Vodafone-Idea to raise money and clear all dues.

Why Vodafone-Idea Lenders Are Helping?

Despite the fact that VI is facing financial stress and losing its grip on the market, both co-promoters are not willing to add more money. On the other hand, banks like State Bank of India, YES Bank, ICICI Bank, IDFC Bank, Punjab National Bank, HDFC Bank, and IndusInd Bank are lending money and approving bank guarantees as Vi clears all interest payouts on time. In addition, local lenders are helping as telecom operator has one year to clear spectrum payments.

 

Why Fundraising Is Important For Vi?

Fundraising is really important for the telco, as Airtel and Reliance Jio are leading the industry. Besides, there are high chances that both leading telecom operators might attract all Vodafone-Idea users in the coming days. So, if Vodafone-Idea wants to sustain in the country, then fundraising is the only option to clear all dues and improving its network in all circles.

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