New Delhi, June 13 (UNI) Stressed mobile operator Vodafone Idea on Thursday approved preferential allotment of equity shares for an aggregate consideration of Rs 2,458 crore to two key vendors – Nokia and Ericsson.
“The Board of Directors of Vodafone Idea Limited approved preferential allotment of about 166 Crore equity shares of face value of Rs. 10/- each, at an issue price of Rs. 14.80 per share, for an aggregate consideration of up to Rs. 2,458 Crore, to two of its key vendors, Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited,” the company said in a regulatory filing with the stock exchanges.
This preferential allotment price is higher by about 35 percent to the Follow Option price and comes with a lock in of 6 months. Nokia and Ericsson will participate for up to Rs. 1,520 Crore and Rs. 938 Crore respectively, subject to approval by VIL shareholders at the EGM to be held on July 10, 2024.
Nokia and Ericsson both have a long-term partnership with VIL, as key suppliers of network equipment, and this preferential allotment will enable VIL to clear part of their outstanding dues.
It further bolsters VIL’s capex rollout for building a top quality 4G & 5G network to contribute towards India’s digital transformation, it said.
Post this preferential issuance, the shareholding of Nokia and Ericsson in the Company will be 1.5 percent and 0.9 percent respectively. The Promoter (ABG and Vodafone) shareholding will stand at 37.3 percent and shareholding of Government of India will stand at 23.2 percent, while the balance 37.1 percent will be public shareholding.
With this equity issuance, VIL has raised about Rs. 24,000 Crore of equity including conversion of 1,440 OCDs in Mar’24 by ATC India (out of 1,600 OCDs issued), FPO issue in Apr’24 and preferential issue to promoters in May’24.
Additionally, in line with its stated fund-raising roadmap, the Company is in active discussions with its lenders to raise debt funding to the tune of Rs. 25,000 Crore.
This comprehensive fund raise (equity and debt) will empower the Company to work towards executing its well-defined strategy including expansion of its 4G coverage and launch of 5G services. This will enable VIL to participate in the large and significant opportunities offered by the Indian wireless sector.
The Company, with a strong subscriber base of 212.6 million (March 31, 2024), 4G population coverage of over 1 billion Indians, competitive spectrum profile, extensive distribution reach and a well-established brand along with differentiated digital offerings, is well positioned to effectively compete in the market.
Akshaya Moondra, CEO, Vodafone Idea Limited, said “VIL is all set to participate in the industry growth with right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities.
As VIL embarks on its growth journey, support from key stakeholders is critical and the agreement with Nokia and Ericsson reaffirms these vendors as long-term partners of the Company, and sets the stage for the next phase of our growth.”
