Can raise $1 billion by June, Vodafone Idea tells lendersMumbai & Kolkata: Vodafone Idea (Vi) has assured lenders that it expects to conclude its delayed fundraising, initially of about $1 billion (Rs 7,500 crore), by the end of June and that it won’t default on any upcoming payments, people familiar with the matter said.

Separately, one of Vi’s domestic lenders, a large public-sector bank, recently extended a bank guarantee for about Rs 1,420 crore by another year, which will be used to clear its remaining dues to the government for 4G spectrum acquired in March. Vi bought 4G airwaves worth Rs 1,993.4 crore and paid Rs 574.65 crore upfront.

“Vi has assured us of raising some funds by June-end as due diligence by some investors is at a peak,” the top executive of a bank that advanced a sizable loan to the telco told ET.

There are concerns over cash-strapped Vi’s Rs 25,000 crore fundraising plan first announced in September, given that the telco hasn’t been able to conclude any deals after talking to potential investors such as an Oak Hill-led consortium, US private equity firms including KKR, besides Canada Pension Plan Investment Board, Caisse de Dépôt et Placement du Québec and Norway’s Government Pension Fund Global.

Industry experts said fundraising has been a challenge for Vi with its weak financial performance and rapid loss of users. Prospective investors want the co-promoters – the UK’s Vodafone Plc and the Aditya Birla Group – to also infuse capital. However, both promoters have stuck to their stance not to put in additional equity in the lossmaking telco.

Spokespersons for Vi, Vodafone Plc and the Aditya Birla Group did not reply to ET queries till press time.

Still, Vi’s local lenders appear keen to give the telco more time because it has until FY23 before it starts paying annual spectrum-related instalments.

“We are not worried as there hasn’t been any major delay in loan repayments or interest payments yet,” a second person said.

He added that Vi is said to have received “select commitments, with negotiations going on in full swing.”

A senior executive of one of Vi’s local lenders said that “the telco is diligently trying to raise cash… it needs some time but will make it finally.”

Vi’s local lenders include State Bank of India, Punjab National Bank, IndusInd Bank, ICICI Bank, Yes Bank, IDFC Bank, ICICI Bank and HDFC Bank.

Vi said in its third-quarter earnings notes that loans falling due beyond 12 months were Rs 8,691.9 crore as of December 31, 2020. It added that “guarantees amounting to Rs 11,371.6 crore are due to expire during the next 12 months and Rs 872.7 crore of incremental guarantees are to be provided.”

Unable to increase tariffs due to competitive pressures, Vi needs to raise cash quickly to bolster 4G operations in 16 priority circles to fight its financially stronger rivals Bharti Airtel and Reliance Jio, arrest its steady loss of mobile users and clear statutory dues to the government.

It has Rs 50,400 crore of adjusted gross revenue dues payable to the government over 10 annual instalments through March 31, 2031. Its annual spectrum payment instalments of about Rs 15,500 crore would start from FY23, once the two-year moratorium ends.

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