Vodafone Idea in talks to raise $2 billion from Oaktree Capital consortium

The consortium is reportedly looking to invest in cash starved Indian businesses to make a profit
Vodafone Idea
Vodafone Idea
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At least $2 billion has been offered to Vodafone Idea by a consortium backed by Oaktree Capital, according to a Bloomberg report. Shares of the telecom copy surged by 3% soon after the report and closed 0.76% up on the Bombay Stock Exchange. The group has reportedly offered to give $2-$2.5 billion to the company. 

This comes after the company’s Board approved fundraising of upto Rs 25,000 crore to the beleaguered telco, thanks to its Adjusted Gross Revenue (AGR) dues. Vodafone Idea had said that the funds can be raised through the issue of equity shares as well as unsecured or secured debentures. Neither of them can be more than Rs 15,000 crore and combined exceed Rs 25,000 crore. 

In September, Vodafone Idea reported a loss for the ninth straight quarter, albeit its losses narrowed to Rs 7,218.2 crore for the July-September quarter from Rs 25,460 crore a year before. It is yet to report an annual profit after Vodafone and Idea merged in 2017.

Recently, Bloomberg reported that firms such as Oaktree Capital and Apollo Asset Management are looking to invest in distressed companies in the country reportedly betting, they can make profits from these capital-starved companies that are struggling to staying afloat.

“India’s economic growth, demographics and stressed assets will come together in the coming decade, giving investors an opportunity of a lifetime,” said Jai Saraf, founder at London-based Nithia Capital told Bloomberg.

Vodafone Idea has so far paid Rs 7,854 in AGR dues and it yet to pay Rs 50,400 crore. It also reportedly was in fundraising talks with Amazon and Verizon for a stake sale but talks reportedly paused with Vodafone Idea wanting further clarity on payment of AGR dues. Mint reported in September that Vodafone Idea were looking to resume talks after the Supreme Court allowed a staggered payment of AGR dues. As per the report, Amazon and Verizon are looking to invest more than $4 billion.

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