Vi Plan: Vodafone-Idea made a plan to deal with difficulties, 14000 crore fund will be for welfare

Vodafone-Idea has proposed to infuse a total equity of Rs 14,000 crore as part of its business revival plan.

Telecom company Vodafone Idea Limited (Vi) is taking the name of reducing the difficulties. To deal with these difficulties, Vodafone-Idea has proposed to infuse a total equity of Rs 14,000 crore as part of its business revival plan. Vodafone-Idea hopes that its welfare can be done with a fund of 14000 crores. Existing promoters Aditya Birla Group (ABG) and UK's Vodafone Group Plc will see half of the total amount.

As per the plan, ABG and Vodafone Group will soon infuse Rs 2,000 crore as fresh equity in the company. Promoters have already invested Rs 5,000 crore since the government's telecom restoration package in September 2021.

Bank loan will be less

ABG, which holds close to 18% stake in Vodafone-Idea, was in talks with foreign lenders to raise fresh funds to invest in the form of promoter equity. ABG has tied up with foreign lenders for around $250 million, but there is a possibility that Vodafone Group may also participate in the funding round. Due to which his bank's debt will be reduced.

ABG, Vi did not respond

Vodafone Idea CEO Akshay Mundra had said during the fourth quarter earnings call that it is in advance talks with three investors to raise finance through equity infusion for the debt-ridden company. In February, the Center approved the long-awaited conversion of Vodafone Idea's outstanding Rs 16,133 crore into stock after assurances from the promoters and equity infusion. Vi has also sought additional borrowing of Rs 25,000 crore from domestic lenders in lieu of committed fresh equity.

May have to face cash crunch

According to sources, Vi has reduced its bank debt from a record high of Rs 40,000 crore to around Rs 12,000 crore at present and the company has asked lenders to release funds commensurate with the equity infusion that has already happened from the promoters . According to experts, Vodafone Idea may face a cash crunch of Rs 25,000 crore in FY2016 and a steep hike in existing tariffs is needed to meet the shortfall.

Vi lost 1.3 million 4G customers in February, the biggest decline in 21 months for the loss-making carrier. To overcome this shortcoming, it needs to invest urgently in 4G infrastructure. So that it can help him to overcome his crisis.