Telecom company Vodafone Idea said on Monday that it will be seeking the approval of shareholders to be able to raise up to Rs 1 lakh crore at the company’s Annual General Meeting, scheduled to be held on September 30. This, it said, was in supersession of the company’s resolution during its board meeting in September 2014. The resolution passed at the time allowed the company to borrow upto Rs 25,000 crore.
“Further, post amalgamation of erstwhile Vodafone India Limited and Vodafone Mobile Services Limited with the Company in August 2018, it is felt necessary that a fresh resolution be passed, encompassing the total overall borrowing limits of the Company, post the amalgamation. In addition the Company is exploring various avenues for raising additional funds for ensuring adequate cash flows for stable ongoing operations,” Vodafone Idea said.
Vodafone Idea also said that it was seeking approval to also create or mortgage or pledge the company’s properties upto Rs 1 lakh crore.
On September 4, the Board of Directors of Vodafone Idea approved a proposal to raise up to Rs 25,000 crore through Global Depository Receipts (GDR), American Depository Receipts (ADR), non-convertible debentures, and other routes.
In a regulatory filing, the company said its board has approved raising of funds through issue of equity shares or securities convertible into equity shares, GDR, ADR, foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and warrants entitling the warrant holders to apply for equity shares, or a combination thereof, up to an aggregate amount of Rs 15,000 crore by way of a public issue, preferential allotment, private placement, qualified institutions placement, or through other permissible mode in one or more tranches. However, the total funds raised under both the modes shall not exceed Rs 25,000 crore, the company said.
The telecom company currently has nearly Rs 50,400 crore to pay off in its Adjusted Gross Revenue dues and has paid Rs 7,854 crore so far. The company has a net debt of 1.12 lakh crore.
Market analysts have time and again said that Vodafone Idea would require raising funds and may also need government support for its survival as it is already under financial stress. The AGR dues have further burdened the company.
Vodafone Idea said on Monday that it will offer its services under a new brand name Vi, as merger and integration of Vodafone and Idea has been successfully completed.