It’s been over nine months of talks between Vodafone Idea Limited and its lenders to raise debt of ₹ 10,000 crore. Despite rounds of negotiations, highly placed sources told businessline that banks aren’t forthcoming to open fresh lines of lending to the telecom company.
Existing bankers to the company including State Bank of India, IndusInd Bank, IDFC First Bank, YES Bank and IDBI Bank have been approached for raising fresh loans, but the request has either been turned down by most banks or put on hold.
“Without Vodafone Plc and Aditya Birla group infusing the committed capital into the company, we cannot budge,” said a top executive of a private bank. In March 2022, Vodafone Idea announced that Vodafone Plc would pump in ₹3,375 crore of capital in its Indian arm, while the Aditya Birla group committed to bring in ₹1,125 crore. This was as part of its ₹14,500-crore mega fund-raise plan. “We are yet to see the promoters infuse the money,” said another senior banker on condition of anonymity.
When reached out to Vodafone Idea, the company’s official spokesperson said they continue to stay engaged with the lenders for new lines of credit. “We believe that the return of bank guarantees and the recent promoter infusion among others, are significant positive catalysts for the company. These developments are being perceived positively by the lenders aiding our on-going discussion on further fund raise.”
Capital infusion
It is gathered that capital infusion by promoters was also one of the unsaid conditions laid down by the government when it consented to convert ₹16,130 crore of AGR dues into equity amounting to 33 per cent stake in Vodafone Idea in October last year. On September 14, the Finance Ministry accepted the proposal.
In fact, sources say in the last 8–12 months, banks have been paring their exposure to Vodafone Idea.
“The company is in a better position now than it was in December last year. It is a standard account for banks. However, as part of deleveraging the corporate book, some banks have brought down its exposure to the telecom company, and hence will not be able to increase the loan outstanding once again,” said a banker quoted above. With smaller private banks particularly faced with this issue, bankers say roping in a new investor may be the best way out for Vodafone Idea.