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Vodafone Group Plc and Aditya Birla Group, two of the largest stakeholders in Vodafone Idea, might dilute their stake if an investor comes around, Hindustan Times reported. Notably, Vodafone Idea holds a 45% stake, while Aditya Birla Group holds 26% stake.
Vodafone and Aditya Looking to Pull out of Vodafone Idea
These plans are different from the ones the telco's promoters have had in mind up until now. Vodafone Idea's promoters were looking to raise funds by bringing in financial investors. However, that has been unsuccessful; and has raised questions on the telco's survival. One of the two people cited by HT said, "the initial plan was to get an investor in and, alongside, the two promoters would have invested some more equity, but that plan has not worked out so far". The person further said, "the two promoter groups are open to the option of doing away with a majority stake or transfer control".
The person also reported that the promoters will only consider a bid if the bidder agrees to pay a premium over Vi's current market price; the promoters seek to pay off the telco's dues with the said premium. Talks have been underway with 5 investors, which include both strategic and financial investors.
The loss-making telco needs to pay ₹22,500 crore between December 2021 and April 2022 towards debt payments, AGR related dues, and spectrum allocation. Its cash balance stood at ₹350 crore on March 31, 2021, and VIL announced a loss of ₹6,985.1 crore for the quarter ended March.
Vodafone Idea's Financial Plight
V&D reported that Vodafone Idea had started discussions with Apollo Global Management. A US-based PE group, Apollo Global will inject as much as $3 billion over the next three months. The telco will look to repurpose the investment to pay its significant upcoming dues. Along with this, the telco also has put its fixed-line business, optical fiber unit and data center business, expecting to raise $1 billion.
The telco received a blow last week as the apex court dismissed Vodafone Idea's plea to reassess its AGR dues. This has left the third-largest telco with AGR dues of ₹58,254 crore. To that regard, the telco has paid only ₹7,854 crore and has to pay instalments till March 31, 2031.