Vodafone Idea board meet on October 21 to discuss a fund-raise via convertible bond issuance to vendor
Vodafone Idea (Vi) has called a board meeting to discuss a fund-raise via convertible bond issuance to vendor as it urgently needs cash to invest in network capex and stop significant customer losses to rivals Reliance Jio and Bharti Airtel.
The company’s board of directors will meet on Friday, October 21, among other things to discuss and decide whether to issue debenture securities convertible into equity shares on a preferential or private placement basis to a vendor, subject to any necessary regulatory and statutory approvals, including the consent of the company’s shareholders.
In early Wednesday trade on the BSE, Vi shares increased 0.83% to Rs 8.53.
The past two years have seen loss-making Vi has had trouble coming up with cash or obtaining outside equity or financing. It has just survived thanks to a government bailout programme for the sector launched in September 2021, which among other things allowed carriers to postpone paying thousands of crores in statutory dues.
Vi has also been unable to establish a 5G deployment plan because to difficulties in concluding contracts for the sale of network equipment and tower tenancy, with vendors pressuring it to settle 4G-related debts and pay upfront for new contracts. In contrast, Bharti Airtel, the closest competition, has already started offering 5G services in 8 cities while jio has started 5g beta trail in 4 cities like Mumbai, Delhi, Kolkata, and Varanasi.