The talks are currently exploratory, and there is no certainty they will result in a deal, people familiar with the matter told ET. The renewed investor interest in the loss-making company comes after it received substantial financial relief earlier this year from the government, which is also its largest shareholder.
IDBI Bank shares tumble 15% as govt likely to halt divestment process: Here’s why
“There are a few serious suitors for the company, and simultaneous talks are going on with them,” one of the people close to the matter said. The company’s management is scheduled to meet institutional investors in Singapore and Hong Kong on March 16 and 17.
The government, which holds nearly 49% stake in Vodafone Idea, has been looking for a strategic investor who could put in capital and run the telecom company. The Aditya Birla Group and the UK’s Vodafone Group Plc are its promoters. “As of now, it is not decided if the promoters would sell their stake, or it would be a fresh issuance of equity,” said another person familiar with the matter.
According to estimates by IIFL Securities, if a strategic investor infuses Rs 50,000 crore fresh equity in Vi, the government could convert Rs 48,000 crore of the company’s spectrum liability into equity without increasing its stake beyond 49%. It would also bring down Vi’s spectrum liability by 40%.
QSR stocks slump up to 47% as weak investor appetite, rising fuel risks dent mood. Time to bottom fish?
Earlier this year, Vodafone Idea received a 10-year relaxation on the bulk of its adjusted gross revenue (AGR) liabilities, providing major cash-flow relief to the debt-laden telecom operator. The Department of Telecommunications (DoT) froze the company’s AGR dues and allowed staggered repayments spread over 16 years until 2041.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
