Kumar Mangalam Birla is rejoining the board of Vodafone Idea, after exiting the company’s board nearly two years ago amidst rising financial troubles for the company at the time. In an announcement on Thursday, the company notified that Birla will be joining Vodafone Idea’s board as an Additional Director (non-executive and non-independent). Thus, Birla is not returning to Vodafone Idea as the Chairman of the company’s board.
Birla served on the company’s board as a chairman since the Vodafone Idea merger. He unceremoniously resigned as the Chairman of the board, when Vodafone Idea’s dues began to mount immensely. Before resigning Birla wrote a letter to the Government to intimate them on the languishing financial troubles that Vodafone Idea faced at the time.
Troubles abated
Since Birla’s resignation, Vodafone Idea’s financial troubles have somewhat abated. The government greenlit a telecom bailout package which has allowed Vi to defer its spectrum and AGR payments that were coming due at the time.
There are some green shoots for likely fundraising opportunities, especially as government has also converted some of Vi’s debt (the interest on the deferred spectrum and AGR payments) into equity. Banks could extend credit to the company as result, although the company has remained silent on the fundraising opportunities ahead.
In the last two years, the Aditya Birla Group has infused equity in the company. In March 2022, Vodafone Group Plc and Aditya Birla Group, parents of debt-laden Vodafone Idea Ltd, threw a ₹4,500 crore lifeline to the troubled telecom operator, in a show of confidence in the revival of the company.
In fact, Aditya Birla Group could be infusing additional equity soon. Therefore, Birla’s inclusion on the board could lend further confidence to lender.