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    Voda Idea gets offer for up to $2 billion line of credit, but with conditions

    Synopsis

    Vi’s ongoing efforts are in line with the telco’s stated plan to raise up to ₹25,000 crore ($3.4 billion).

    Agencies
    Vi’s ARPU at ₹119 at the end of the September quarter lags that of Bharti Airtel (₹162) and Reliance Jio (₹145).
    Mumbai | Kolkata: Vodafone Idea (Vi) has got an initial proposal for up to $2 billion (₹15,000 crore) line of credit from a consortium led by US investment firm Oak Hill Advisors, bankers and industry executives aware of the matter said.

    Sixth Street, Twin Point Capital and Varde Partners are among other global investors in the consortium that has given a non-binding term sheet to Vi, they said. The proposed funding model will likely be a blend of bonds and warrants that will give the consortium members an option to convert part of the loan to shares of the company at a later stage, they said.

    The loss-making telco owned by UK’s Vodafone Group and India’s AV Birla Group needs funds urgently to bolster its 4G network, arrest a steady loss of customers to rivals and pay arrears to the government.

    Negotiations are on to finalise the terms, an executive with knowledge of the matter told ET. The consortium is likely to submit a binding term sheet only by the end of December, after both sides agree on the agreements, the people said.

    Vi has separately also reached out to Canada’s Brookfield to raise cash, they said.

    Vodafone Group Plc, Sixth Street and Brookfield declined to comment, while Vi, AV Birla Group, Oak Hill, Twin Point and Varde did not respond to ET’s queries till press time Sunday.

    2
    Funds may be Released in Tranches
    Vi’s ongoing efforts are in line with the telco’s stated plan to raise up to ₹25,000 crore ($3.4 billion).

    Last month, managing director Ravinder Takkar had said Vi’s fundraising plans had elicited a strong response and was likely to conclude in two to three months. Mumbai-based InCred Capital and its US investment banking partner PJT Partners along with BNP Paribas are known to be helping Vi in its efforts to raise funds.

    A non-binding term sheet is essentially a letter of intent from a clutch of investors keen to invest in Vi, but subject to fulfilment of conditions, a top industry executive said. Stitching up the potential $2 billion funding could take time, as “Vi’s potential investors will do a detailed financial, business and legal due diligence in consultation with its current lenders and stakeholders” before releasing any money, he added.

    Funds are likely to be disbursed in tranches linked to the company meeting stiff, periodic business targets on operating income, subscriber growth, average revenue per user (ARPU) and revenue market share fronts, the executive said.

    Vi’s ARPU at ₹119 at the end of the September quarter lags that of Bharti Airtel (₹162) and Reliance Jio (₹145). The telco has not matched the two rivals on 4G coverage, and its plunging customer base too is a concern for lenders and potential investors.
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    7 Comments on this Story

    Anil Patni63 days ago
    In future Amazon invest in Vi because reliance inter in mall and local shopee,,and kirna
    Binu Pillai64 days ago
    Tough playing against Ambani - Modi combo..
    Guest64 days ago
    say something, vi are holding share. are not
    Read before you invest. Insights on Vodafone Idea Ltd.. Explore Now
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