- Vodafone Idea’s board of directors will meet on October 21 to consider raising money.
- The meeting comes at a crucial time when:
industrial towersone of the main tower providers of Vodafone ideademanded the telco to pay its dues.
- Shares of the telco gained following the announcement of the fundraiser.
Vodafone Idea’s board of directors will meet on Oct. 21 to consider fund-raising through convertible bonds, the telco said in an exchange request, without revealing details about the size of the fund-raising.
“We would like to inform you that a meeting of the company’s board of directors is scheduled for October 21, 2022, including to propose the issuance of bonds convertible into common stock on a preferred/private placement basis to a supplier,” said Vodafone Idea in its exchange application.
Convertible bonds are long-term debt that can be converted into shares after a certain period of time.
Vodafone Idea’s latest fundraising effort is to invest in its network and also pay its dues to its service providers, including Indus Towers – a tower company in which rival telco Bharti
Reportedly owes more than ₹7,000 crore to Indus Towers. The tower company has asked the telco to clear its dues or risk losing access to towers from November.
In response to the news, Vodafone Idea shares rose 1% to 8.55. However, this is still below the ₹10 level that the government is reportedly waiting for before converting its debt into equity, as part of the telecoms aid package announced in 2021. The package gave telcos an option to go for a four-year moratorium on, among other things, their adjusted gross revenues (AGR) and spectrum rights.
The tide that won’t turn
In 2022, Vodafone Idea has lost more than 12 million subscribers so far, according to data from telecom regulator TRAI. are rivals
While the telecom sector is expected to remain stable in the second quarter, analysts suggest Vodafone Idea will continue to grow weaker.
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