Idea promoters raise ~32.5 bn in preferential share allotment
Idea Cellular Limited, the third-largest wireless operator in India by subscriber base, on Monday completed the allotment of 326.6 million equity shares to the promoter Aditya Birla Group to raise ~32.50 billion. As a result of this preferential allotment, the aggregate shareholding of the promoter group in Idea Cellular has increased from 42.4 per cent to 47.2 per cent.
“Today (Idea) completed the allotment of 326,633,165 equity shares to the Aditya Birla Group entities, at an issue price of ~99.50 per share (including premium of ~89.50 per share) aggregating to ~3,250 crore (~3.25 billion),” said the company in a statement.
With the planned fund raise, combined with the recently announced sale of Idea’s towers and potential monetisation of the Indus stake, the firm will be better capitalised to participate in the growth opportunities offered by the sector”
The preferential allotment of equity shares follows the approval by Idea’s board of directors, on January 4, to raise capital of up to ~67.50 billion. This amount includes ~32.50 billion through a preferential allotment to the promoter group. An additional ~35 billion was to be raised through further preferential allotment, qualified institutional placement, rights issue or such other route that Idea’s board determines, the company said in a filing.
“With the planned fund raise, combined with the recently announced sale of Idea’s towers and potential monetisation of the Indus stake, the firm will be better capitalised to participate in the growth opportunities offered by the sector,” said Kumar Mangalam Birla, chairman, Aditya Birla Group.
This equity infusion as well as the proposed ~35 billion capital will reduce Idea’s net debt and as a result Vodafone’s net debt contribution to the merged entity will also be reduced by an equivalent amount, Idea said.
The recently announced sale of Idea’s and Vodafone India’s standalone towers to American Tower Corporation for an aggregate enterprise value of ~78.5 billion and the potential monetisation of Idea’s 11.15 per cent stake in Indus Towers, will further augment the long-term capital resources of the company, the company said in the filing.
Idea’s shares closed 1 per cent higher at ~84.70. Idea’s net debt as of December 31 was ~557.8 billion. Business Standard had reported last month that banking sources believed Vodafone was concerned about Idea’s huge losses and had requested the promoters to fund the losses before the closure of their impending merger in March.