The debt-laden Vodafone Idea Limited has approved the issuance of optionally convertible debentures to vendor American Tower Corporation (ATC) in an exchange filing .
The telecom company’s board also approved the preferential issuance of up to 16,000 Indian Rupee-denominated debentures, with a face value of Rs 10,00,000 each, aggregating to Rs 1600 crores, to ATC Telecom Infrastructure Private Limited. The company will hold an extraordinary general meeting on February 25 to seek approval from its shareholders.
According to the BSE filing, the debentures are unsecured, unrated, and unlisted and will be convertible into equity shares at a conversion price of INR 10 per share. The funds raised from the issuance will be used to pay the amount owed by the company to ATC under the master lease agreements and for general corporate purposes.
We wish to inform you that the Board of Directors of Vodafone Idea Limited (‘the Company’), at its meeting held today i.e. 31 January, 2023, has again approved Preferential Issuance of upto 16000 Indian Rupee denominated optionally convertible, unsecured, unrated and unlisted debentures having a face value of Rs. 10,00,000 each, in one or more tranches, aggregating upto Rs.1600 crores, convertible into equity shares at a conversion price of Rs. 10/- per equity share, to ATC,” Vodafone’s exchange filing said.
Vodafone Idea has informed its shareholders about the approval through a letter and has also approved the convening of an Extraordinary General Meeting on February 25, 2023, for seeking approval from its shareholders. The coupon rate of the debentures is 11.2% per annum and will be payable semi-annually during its term. The maximum term of the debentures is 18 months from the date of issuance and allotment of the first tranche.
The issuance is subject to approval from the shareholders in the General Meeting and other regulatory and statutory approvals. It is worth noting that the approval of the issuance of the optionally convertible debentures is crucial for Vodafone Idea, which is currently grappling with debt and a challenging business environment.
The approval from the shareholders is expected to provide a much-needed boost to the company’s finances and help it to stay afloat in the highly competitive telecom industry
