Vi dials Apollo Global to raise $1bn in debt and equity

Apr 11, 2022 | News

Vodafone Idea Ltd is in superior talks with US personal equity investor Apollo Global to raise as a lot as $1bn by promoting a mixture of debt and equity, two individuals conscious of the matter stated.

The discussions are at a sophisticated stage, with the long-awaited announcement seemingly later this month, the individuals stated requesting anonymity.

Debt-laden Vodafone Idea has been searching for to raise funds from exterior buyers for greater than a year, however discovered it tough to persuade buyers to write giant cheques, given its mammoth authorities dues.

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The nation’s third-largest telecom operator was getting ready to chapter when the federal government supplied a rescue bundle that gave the troubled firm extra time to pay dues and convert part of it into equity, amongst different measures.

“Discussions have been occurring for some time now and we had hit a roadblock over the conversion worth from debt to equity,” said one of the people cited above. “Typically, mezzanine funding involves a convertible structure where an investor is able to convert debt into equity to maximize gains when the investee company hits mutually agreed milestones,” the individual stated.

However, Vodafone Idea’s fundraising has obtained a shot in the arm in the previous weeks, with capital infusion by promoters and return of financial institution ensures by the federal government, following final yr’s authorities bailout bundle for the telecom sector.

A spokesperson for Apollo Global declined to remark. An electronic mail despatched to a spokesperson for Vodafone Idea didn’t elicit a response.

Apollo Global Management is without doubt one of the largest asset managers globally and sometimes invests in credit score, personal equity, and actual property, amongst different asset lessons and has shut to $500bn of property below administration.

In India, it had arrange a particular conditions fund, Aion Capital, in partnership with the ICICI group. The fund has raised $825m and has invested in 12 firms.

Analysts stated that the cope with Apollo Global, if it occurs, will pave the best way for extra investments in the corporate.

Vodafone Idea wants to raise as a lot as $3bn to improve its community and purchase spectrum in the upcoming 5G spectrum auctions.

On Friday, the division of telecommunications stated it has returned financial institution ensures to Bharti Airtel and Vodafone Idea, in accordance to an affidavit filed by the division in the Supreme Court. The financial institution ensures quantity to almost ₹23,000 crore.

The division has advised the apex courtroom that the financial institution ensures have been returned because the telecom carriers opted for a moratorium on spectrum public sale instalments and no instalment funds had been due until put up the moratorium interval ends in 2025.

The transfer got here as a serious reduction to debt-laden Vodafone Idea, which has been searching for return of the ensures.

In addition, the conversion of curiosity on dues associated to adjusted gross income and spectrum funds amounting to ₹16,000 crore—into equity by the Indian authorities will additional strengthen its steadiness sheet.

Vodafone Idea’s complete dues are almost ₹1.9 trillion. The firm just lately received ₹4,500 crore from its promoters Vodafone Group Plc and Aditya Birla Group.

The telco additionally has board approval to raise as a lot as ₹10,000 crore from new buyers by equity or debt, to assist compete with bigger rivals Reliance Jio and Bharti Airtel and for purchasing 5G airwaves in the upcoming spectrum auctions.

Source: Pehal News

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