Aditya Birla Group and Vodafone Group seeking to invest $400 million into Vi amid financial distress

According to sources, both the parent organisations will invest close to $200 million each to maintain their existing stake in their company while also seeking fresh funding from external investment.

Vodafone Idea Ltd. is likely to see fresh capital infused into the company by promotors, sources stated on Tuesday, October 12. Reportedly, both Kumar Mangalam Birla, Chairperson of the Aditya Birla Group and United Kingdom-based Vodafone Group Plc are looking to invest $400 million in the joint venture to keep it afloat amid financial distress. 

According to sources, both the parent organisations will invest close to $200 million each to maintain their existing stake in their company while also seeking fresh funding from external investment. The capital invested by both groups is expected to increase external investors’ confidence in the struggling telecom operator and draw more investments from them. 

The news comes just a day after speculations arose regarding Kumar Mangalam Birla’s investment in the company. It was reported that the Chairman was considering investing less than Rs. 1000 crores of his own capital into the venture while it was dubious that the UK-based Vodaphone Group would put any more money into reviving the telecom operator. 

A source close to the Vodafone group also hinted that promoters were considering selling a part of Vodafone Idea’s stake to Indus Towers, an independently managed company offering infrastructure services to telecom operators. “Monetising the assets in Indus is really the plan,” the source stated. 

The telecom operator, which has been grappling to secure external investments due to its deteriorating financial condition, will only grab the interest of private investors if the company owners pump in fresh capital first, the source continued. 

Vodafone Idea, with a market valuation of Rs. 31,000 crores, has to repay bank loans worth Rs. 9,000 by the end of the fiscal year, including Rs. 5,000 crores in non-convertible debentures. The debt-ridden company’s total liabilities stood around Rs.1.9 trillion as of March 31, 2021. 

At present, UK’s Vodafone Group Plc owns a 44.39 per cent stake in Vi while the Aditya Birla Group’s share is 27.66 per cent as its co-promoters. Moreover, the Vodafone Group also owns a  28.12 per cent share in Indus Towers. 

 

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