Voda Idea’s fund plans hinge on SC

MUMBAI: Vodafone Idea Ltd, which is struggling to stay afloat after the top court ordered it to pay ₹50,000 crore in past dues to the government, has initiated talks with investors to raise funds, two people directly involved in the process said.

The plan to raise funds from financial investors, including private equity firms will, however, depend on whether the Supreme Court modifies its October judgement to allow for easier terms of payment and the government provides a waiver on interest payments, the two people said on condition of anonymity.

“The company is talking to investors to raise external financing, given that both Vodafone and Birla group are unlikely to pump in more money. Investors are drawing comfort from the fact that the price war is over and with recent price hikes, they expect average revenue per user to grow substantially,” one of the two people said.

Raising external financing is critical for the firm as its current cash flows will not support payment of the dues and any new capital expenditure, except its existing debt repayments, said a Vodafone Idea official, the second person cited above. “Survivability of the company will depend on whether it gets any relief on the AGR dues in the form of easier repayment terms on these dues,” said the official.

The firm has stated its inability to sustain operations without a relief on regulatory dues and has said that it will be compelled to file for bankruptcy. Vodafone Idea does not comment on speculation, a spokesperson for the company said in an email response to Mint’s queries.

The telco’s fundraising plans are also critical for the Indian banking industry, which has a large exposure to the company as well as the telecom sector.