Vodafone Idea Ltd. is considering raising debt financing to accelerate growth, people familiar with the matter said, following the government’s decision to cap annual payouts for AGR dues.
India’s third-largest mobile phone operator by users may seek the financing from local and global banks, the people said, asking not to be identified because the deliberations are private. Vodafone Idea plans to use part of the proceeds to improve its network and better compete against larger rivals Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd., the people said.
The joint venture of Aditya Birla Group and the UK's Vodafone Group Plc has been in talks with New York-based Tillman Global Holdings about a possible stake stake valued at several billion dollars, The Economic Times reported in November. The investment was subject to the government providing a financial package to cover all of Vodafone Idea’s liabilities, according to the report.
While Vodafone Idea has shifted focus toward other options including raising debt, a potential equity investment may still take place, the people said. TGH, as Tillman Global Holdings is known, remains in talks with the company’s top shareholders about making a large equity investment, one of the people said.
{{/usCountry}}While Vodafone Idea has shifted focus toward other options including raising debt, a potential equity investment may still take place, the people said. TGH, as Tillman Global Holdings is known, remains in talks with the company’s top shareholders about making a large equity investment, one of the people said.
{{/usCountry}}A representative for Vodafone Idea didn’t have any immediate comment, while Tillman Global Holdings declined to comment.
To help prevent India’s telecom sector from becoming a duopoly, the central government has agreed to cap yearly payments till 2035 for past spectrum fees, granting Vodafone Idea a critical lifeline.
The government is the largest shareholder in the company with a 49% stake, followed by Vodafone Group Plc and Aditya Birla Group.