Vi Board approved on Friday to raise Rs 1,600 crore from American Tower Corporation through selectively convertible debt and use the proceeds to pay tower company dues.
These funds will be utilized by Vodafone Idea to pay a portion of the unpaid fees to the tower operators for the rental of assets to provide mobile services in India.
This has helped telecommunications companies struggling financially, and has so far worked to raise capital from investors.
The telecom company said it would sell 16,000 convertible bonds, unsecured, unrated, and unlisted debt for 10 lakhs each in one or more tranches. They will each be converted into shares of Rs 10 and will be transferred preferentially to ATC Telecom Infrastructure Private Limited. The company will seek shareholder approval for the issuance of the OCD on November 21.
Vi’s lack of funding has hampered payments to providers and rollouts of 5G services. The conversion from interest on adjusted gross income to government capital has not yet taken place.
“The funds raised will be used to pay amounts owed to ATC under the master lease agreements and for general corporate purposes,” Vodafone Idea said.
Industry executives said that “The move to pay ATC would provide the loss-making telecom service provider, which has a debt of more than ₹1.9 trillion, some breathing space as it struggles to raise ₹20,000 crore either through equity or debt from external investors.”
Having lost over 15 million subscribers in the 12 months ending June, Vi continues to experience high churn.
Vi CEO Akshaya Mundra briefed shareholders in August that it will launch 5G services after completing new financing and signing contracts with equipment manufacturers.
Vi lately bought 6228 MHz of spectrum in various bands worth Rs 18,799 million at a 5G spectrum auction.
