Debt-ridden The board of Vodafone Idea today authorised raising money on a preferential basis from its promoter group company Euro Pacific Securities in the amount of Rs 436.21 crore through the issuing of equity shares or convertible warrants.
We would like to notify you that the Board of Directors of Vodafone Idea Limited (the “Company”) approved, among other things, the financing of cash totaling up to Rs. 436.21 crore by the issuing of either:
- Upto 42,76,56,421 Equity Shares of the face value of Rs. 10/- each
- Upto 42,76,56,421 Warrants convertible into Equity Shares, to Euro Pacific Securities Ltd. (a Vodafone Group entity and promoter of the Company), on a preferential basis,” Vodafone Idea said in an exchange filing.
According to the ICDR Regulations, the relevant date for establishing the preferential issue’s floor price is June 15, 2022. The board also gave its permission for the company’s Extraordinary General Meeting to be held on July 15, 2022, in order to seek shareholder support for the aforementioned preferential issuance.
The Vodafone Idea (VIL) board authorised funding up to Rs 14,500 crore earlier this year, including Rs 4,500 crore from Vodafone and Aditya Birla Group, the parent companies.
Following a protracted period of financial strain, telecom service providers, particularly VIL, received a boost from the government last year when it approved a massive relief package that included a four-year break for businesses from paying statutory dues, permission to share limited airwaves, a change in the definition of revenue on which levies are paid, and 100% automatic foreign investment.
After that, VIL decided to convert the approximately Rs 16,000 crore in interest due liabilities to the government into equity. As a consequence, the government will own around a 33% interest in the business.