Vodafone Idea shelves debt fundraising; plans for QIP: Report

[devikad]

Vodafone Idea shelves debt fundraising; plans for QIP: Report

NEW DELHI: Ailing Vodafone Idea ('Vi'), which was planning to raise a credit line of up to $2 billion, may now opt for a pure equity round for fundraising, Hindustan Times reported.

The telco is considering a change in strategy now because investor sentiment has significantly improved along with the company's prospects, the report said. "The company now plans to raise capital via a fresh equity issuance through a qualified institutional placement (QIP)," a person was quoted as saying.

The fundraising, according to the publication, will be done in two tranches and a large marquee investor is also likely to be brought in to provide stimulus to the stock. Only when the stock gets a fillip, the second tranche would be launched so that the sale does not result in too much dilution of promoters' stake, the first person said.

"In the proposed qualified institutional placement, the existing promoters are also likely to participate to ensure their holding doesn't get diluted much and also the much-required capital infusion is done," said the second person.

The UK's Vodafone Group Plc holds around 43% in Vi, while the Aditya Birla group holds 29%.

The second person added that the telco plans to capitalise on the increasing optimism amongst institutional investors, especially after the US elections.

ET had reported that US-based GoldenTree Asset Management and Pacific Investment Management Co (PIMCO) have likely joined a consortium led by investment firm Oak Hill Advisors, which is in discussions to provide a $2 billion (Rs 14,720 crore) credit line to Vodafone Idea, according to three people aware of the matter.

ET recently reported that Vodafone Group Plc is considering selling a small portion of its 28.12% stake in Indus Towers to inject capital into its ailing Indian telecom joint venture, Vodafone Idea (Vi) even as it continues to lose its user base to rival telcos Jio and Airtel.

Source: https://telecom.economictimes.indiatimes.com/news/vodafone-idea-shelves-debt-fundraising-plans-for-qip-report/80494036