Vodafone Idea relies on SBI Capital Markets to raise and restructure loan

Vodafone Idea reportedly appointed SBI Capital Markets last week to negotiate the restructuring of its current loan. The telecom operator’s loan is now worth between Rs 20,000 and 23,000 crore and is due to be repaid over the next four years. Not only the restructuring, but SBI Capital Markets will also help Vodafone Idea raise new loans. The loan will allow the telecommunications company to increase investment levels so that it can rapidly expand 4G to directly compete with Reliance Jio and Bharti Airtel, reports ET Telecom.

Vodafone Idea aims to secure longer term for loans at lower interest rates

The cash-strapped telecommunications company is trying to come up with a comprehensive restructuring plan that will include an overhaul of loans and a longer term to repay with lower interest rates. Vodafone Idea’s move is its effort to raise capital as there has been no chance of having a new investor on board or getting help from developers.

Vodafone Idea was also considering selling convertible bonds overseas to raise $750 million to $1 billion. This should have been done in the first week of February only, but has now been brought forward a few weeks.

The telecommunications company has also been in talks with private equity investors such as Apollo Global Management and Carlyle to raise up to an additional $1 billion. Whatever Vodafone Idea (Vi) plans, it should happen quickly as the telecom operator’s users leave the network in large numbers with each passing quarter.

Vodafone Idea needs to secure the capital somehow so the telco can justify another price hike with an improved 4G network.

SBI Capital Markets will negotiate with banks on behalf of Vodafone Idea and attempt to restructure existing loans while trying to secure a loan from financial institutions in the near future. Hopefully something good will come out of all this for Vodafone Idea before the end of FY22.

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