Aditya Birla Group Chairman Kumar Mangalam Birla is looking to infuse some of his own capital in Vodafone Idea.
Aditya Birla Group chairman Kumar Mangalam Birla is looking to infuse some of his own capital in Vodafone Idea. At the same time, Vodafone Group can sell at least some of its stake in its tower company Indus Towers, so that some money can be invested in the loss-making telecom company. According to a report in Economic Times, people with knowledge of the matter told him that after this external funding would be taken.
Most of the funds will be raised from external sources
A senior Vodafone Group official told ET that most of the funds would come from outside sources. KM Birla will invest some money, but it will not be a sufficient amount. Whereas Vodafone is not expected to get more money from the UK group. He said that the real plan is to monetize the assets in Indus. The official further said that clearly, investors want both the promoters to put money where they get a chance to grow. After that funds will be raised externally.
Another person familiar with the matter told ET that the money to be charged by the promoter is expected to be much less than the Rs 10,000 crore being reported in some media reports. Aditya Birla Group (ABG) and Vodafone Idea have not yet commented on this matter. Vodafone Group declined to respond to ET.
At present, Vodafone Group Plc of UK and Aditya Birla Group hold 44.39 per cent and 27.66 per cent respectively in Vodafone Idea as co-promoters. Vodafone Group owns 28.12 per cent in Indus Towers.
Company in trouble for a year
For almost a year, the telecommunications company, which is struggling with money, has been in discussions with many potential investors. But it has failed to raise funds worth Rs 25,000 crore as per its plan and has blamed the sector’s inability to do so. However, the government announced a relief package in the middle of September. In which, four-year moratorium on AGR and spectrum payments, reduced bank guarantee and option to convert statutory dues into government equity. This has eased the burden of potential instant cash flow of Vodafone Idea.
Experts believe that this has made it attractive for investors. He further said that only through the moratorium on payment, the telecom company will be able to save about one lakh crore rupees annually. Before the announcement of the package, ABG and Vodafone Group had refused to infuse fresh equity in the telecom company.
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