Sources from within the company report that Vodafone Idea has work underway on a restructuring plan. Under the said plan, the telco will get a new financial investor, Kumar Mangalam Birla will infuse capital in the telco, and banks will restructure the telco's loan terms.
Vodafone Idea to Restructure
An official from Vi said that the company is working on an financial restructuring. They added that the negotiations are underway with both new investors and banks. They added, "with the Indian government giving the moratorium for the payment of AGR dues, there is visibility on the company obligations. With fresh equity coming in from the promoter and a new investor, the operations will become viable".
Right now, the question remains that how much money will Birla invest into Vodafone Idea. The amount will depend on two things; how much money the new investor plugs in, and the willingness of banks to give Vi a discount. Notably, Grasim, which holds a stake in Vi on behalf of ABG, will have to forego some of its holdings. However, the official quoted above said that the ABG will maintain its 27% stake in the company regardless. The other co-promoter, Vodafone PLC, has not given any signs of infusing any new equity in the company, though. Notably, the UK-based telco owns a 44.3% stake in Vi.
Talking about Vi's loans, a top banking source has said that talks have been ongoing to increase the duration of the telco's loans. However, right now, there are no offers to convert Vodafone Idea's debt to equity. Currently, Vi owes Rs. 37,562 crore in debt facilities as of August 2021. Worryingly, the company has to pay Rs. 6,000 to bondholders; its debentures are coming up for repayment on December 13.
The telco has been trying to raise Rs. 25,000 crore in funds since last September. However, its substantial statutory dues have so far left every investor disenchanted. However, things may change now as the Government announced a 4-year moratorium on those dues, giving Vi an annual respite of Rs. 25,000 crore. The telco will now participate freely in the 5G spectrum auction, the official cited said.
If everything goes according to plan, we might see a resurgent Vodafone Idea.