Vodafone Idea to hold board meet this week to consider fundraising

The corporation had till September 15 to make a decision regarding the equity conversion while also awaiting DoT approval for the conversion of AGR dues totaling Rs 16,000 crore through FY17 into 33% government-owned stock.

The board of Vodafone Idea(Vi) are scheduled to meet this week on Friday, October 21, 2022 to discuss raising money through the issuance of debenture securities convertible into equity shares on a preferential/private placement basis to a vendor. This was announced on Tuesday. In the first hour of trading on Wednesday, shares of Vodafone Idea increased by more than a percent to 8.5 rupees a share on the BSE.

In a filing with the stock exchange, Vodafone Idea stated: "We wish to inform you that a meeting of the Board of Directors of the company is scheduled to be held on Friday, 21st October, 2022, inter-alia, to consider and evaluate a proposal for issuance of debenture securities convertible into equity shares on a preferential/private placement basis to a vendor, subject to regulatory and other statutory approvals as may be required, including approval of the shareholders of the company."

According to sources from last month, Vodafone Idea has chosen not to convert the interest on the moratorium of paying adjusted gross revenue (AGR) dues of 8,837 crore for FY18 and FY19 into equity that will be controlled by the government.

The corporation had till September 15 to make a decision regarding the equity conversion while also awaiting DoT approval for the conversion of AGR dues totaling Rs 16,000 crore through FY17 into 33% government-owned stock.

The government gave the telecom operator the option of a moratorium on the payment of the dues beyond the earlier moratorium, which was part of the relief package announced in September 2021 , where AGR-related dues up until FY17 were included. The telecom operator's board had approved the four-year deferment of AGR dues.

The rescue package was designed to benefit all carriers and help the industry recover from the negative effects of high debt levels and low tariffs, which increased losses and restricted revenue generation.

Vi's total gross debt ( excluding lease liabilities and including interest accrued but not due) as of the end of the April-June 2022 quarter was 1,99,080 crore. The telco's stock's year-to-date decline as of today is greater than 46%.