The Board of Directors of Vodafone Idea Ltd (VIL) will meet on Friday to discuss and evaluate proposals for raising funds in one or more tranches through public issue, issue of equity shares or securities among other options.
The announcement came after the Supreme Court's September 1, verdict on the Adjusted Gross Revenue (AGR) issue, wherein the top court gave a 10-year timeline to the telcos to repay their dues, with an upfront payment of 10% by March 31, 2021.
"A meeting of the Board of Directors of the Company is scheduled to be held on September 4, 2020, inter-alia, to consider and evaluate any and all proposals for raising of funds," the company said in a regulatory filing late Tuesday.
The board will consider raising funds in one or more tranches by way of a public issue, preferential allotment, private placement, including a qualified institutions placement or through any other permissible mode or combination thereof, by way of issue of equity shares or by issue of any instruments or securities, including securities convertible into equity shares.
According to an assessment by the Department of Telecommunications, (DoT), Vodafone Idea owed a total of Rs 58,254 crore. As per the government, the operator now owes balance AGR dues of around Rs 50,399 crore. The telco will have to pay around Rs 1,128 crore in AGR dues every quarter for the next decade.
On Wednesday, shares of Vodafone Idea rose after plunging in the previous session weighed down by the Supreme Court verdict. Around 11 am, its shares on the BSE were trading at Rs 9.61, higher by 8.10% from its previous close.
Earlier, Vodafone Idea had said that they would need a long payment period without which its survival was in question. The impact of the AGR judgment will largely be felt by Vodafone Idea which is under severe financial stress.
Noting that a shorter repayment timeline is a big setback for Vodafone Idea, Sonam Chandwani, Managing Partner at KS Legal & Associates, had said that with staggering liquidity stress, a review petition in near future is foreseeable.
"A 10-year window will put pressure on cash flows and Vodafone may sell a huge chunk of equity shares to a potentially strong investor, as the company has a bleak future with a very high investment requirement," she said.
Vodafone Idea’s survivability depends on its ability to raise funds. Following the filing with the stock exchanges, its stock surged.
With IANS inputs