Vodafone Idea in talks with Amazon, PEs for Rs 20,000 crore funding: Report

Debt-ridden telecom operator Vodafone Idea is in talks with ecommerce major Amazon and a clutch of private equity investors for Rs 20,000-crore funding

“Talks are on with several players and an announcement on new investors is expected soon,” a banking source told the publication. “They are about getting equity investment of up to Rs 10,000 crore and the rest is likely to be in debt,” a report by the Business Standard said, quoting sources. .

The telecom company is planning to use the proceeds of the sale to bid for the upcoming 5G spectrum auction and capital expenditure for the roll-out of services by year-end.

As per the report, the new investors are planning to come onboard after the government picks up a stake in the company in lieu of its dues.

The government is expected to hold 35.8 per cent of its shares and become the largest shareholder after the company’s Board approved the conversion of interest liabilities into equity. The full amount of such interest with a net present value (NPV) of approximately Rs 16,000 crore related to spectrum auction instalments and adjusted gross revenue (AGR) dues will be converted into equity, as per a regulatory filing.

In October 2021, the Department of Telecommunications (DoT) had given three options to the company as part of the Telecom Reforms Package. The company was granted an option to defer the payment of spectrum auction instalments due up to four years with immediate effect, excluding the instalments due in respect of Spectrum Auction 2021.

Additionally, it was given a one-time opportunity to opt for deferment of AGR-related dues as determined by the Supreme Court in the AGR case, by a period of four years with immediate effect. Lastly, it was allowed a one-time opportunity to exercise the option of paying interest for the four years of deferment on the deferred spectrum instalments and AGR dues by way of conversion into equity of the NPV of such interest amount.