Vodafone Idea said on Thursday that the board has approved the allotment of 338.3 crore shares at Rs 13.30 per scrip to three promoter group entities – Euro Pacific Securities, Prime Metals and Oriana Investments – for approximately Rs 4,500 crore. The telecom operator had announced Rs 14,500 crore fundraising plans earlier this month, with promoters to inject Rs 4,500 crore.
“…the Capital Raising Committee of the Board of Directors, at its meeting today…considered and approved the allotment of 22.214.171.124,645 shares of Rs 10 each in cash at an issue price of Rs 13 .30 per share share (including a premium of Rs 3.30 per share share), added up to Rs 4,500 crore to the following nominees,” said Vodafone Idea in a BSE filing. This includes the allocation of 1,96,66,35,338 shares to Euro Pacific Securities (promoter), 57.09.58,646 shares in Prime Metals (promoter), and 84.58.64,661 shares in Oriana Investments (promoter group).
The shareholders of the company had approved the said issuance by special resolution passed at the extraordinary general meeting of 26 March 2022. to Rs 126.96.36.199.78.850 consisting of 188.8.131.52,885 shares with a par value of Rs 10 each it added.
Debt-ridden telecom operator Vodafone Idea (VIL) announced on March 3 that the board has agreed to raise Rs 14,500 crore, including Rs 4,500 crore from promoter entities – Vodafone and Aditya Birla Group. An amount of Rs 10,000 crore was to be raised through equity or debt instruments, in one or more tranches, it had said.
In a regulatory filing, the company had subsequently stated that the board has approved the issuance of up to 338.3 crore shares of the nominal value of Rs 10 each at an issue price of Rs 13.30 per share for a total consideration of up to Rs 4,500 crore. . The fundraising comes at a time when Indian telecom operators are adding more firepower to their arsenal as the market gears up for the rollout of 5G services that will usher in ultra-fast speeds and spawn new services and business models.
The telecoms division is preparing the groundwork for the auction of 5G radio waves, even as regulator Trai’s recommendations on spectrum pricing and other aspects are expected soon. Birlas owns more than 27 percent of VIL, while Vodafone Plc owns more than 44 percent.
Telecom service providers, most notably VIL, had hit the bull’s eye last year with the government approving a blockbuster aid package that included a four-year break for businesses from paying legal dues, permission to share scarce ether, change in the definition of income on which taxes are paid and 100 percent foreign investment through the automatic route. The government has also given telcos the option to convert the amount of interest related to the moratorium into equity.
Following this, Vodafone Idea has opted to pay interest charges of about Rs 16,000 crore through preferred stock.
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