Vodafone Idea (Vi) is offering a Rs 2,458 crore stake in the financially troubled telecom operator to long-term vendors Nokia and Ericsson to partially clear its outstanding dues. The company’s board has approved the preferential issuance of 1,027 million equity shares with a face value of Rs 10 each to Nokia and 633.7 million shares to Ericsson, according to a regulatory filing on Thursday.
At an issuing price of Rs 14.8 per share, Nokia will receive an equity stake worth Rs 1,520 crore, while Ericsson will receive equity worth Rs 938 crore. “After this preferential issuance, Nokia and Ericsson will hold 1.5 percent and 0.9 percent of the company, respectively,” Vi said.
Following this issuance, the combined stake held by promoters Aditya Birla Group and Vodafone Plc will be 37.3 percent, the Centre will hold 23.2 percent, and the remaining 37.1 percent will be public shareholding.
Vi’s shareholders must approve the proposal, and an extraordinary general meeting has been scheduled for July 10 to consider the stake transfer, the company announced.
Akshaya Moondra, Vi’s CEO said, “Vodafone Idea is poised to participate in industry growth with the right investments to expand its 4G coverage and offer a 5G experience to its customers, while focusing on its execution capabilities.”
In addition to alleviating vendor concerns about outstanding payments, the move is expected to garner backing from the two global telecom equipment behemoths, allowing Vi to expand its 4G coverage more quickly. The expansion of 4G coverage, including the establishment of more towers in the sub-gigahertz segment, capacity growth, and the 5G rollout, are the company’s primary goals. Vi positioned the preferential issue as a move to bolster its capital expenditure (capex) rollout.
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