New Delhi, September 7
Debt-ridden telecom operator Vodafone Idea on Monday stated it’ll search shareholders’ approval to boost borrowing restrict to Rs 1 lakh crore, on the annual basic assembly (AGM) scheduled to be held on September 30.
Shareholders of the corporate, which was earlier listed as Idea Cellular, had authorized a borrowing restrict of Rs 25,000 crore at AGM in September 2014.
In a regulatory submitting, Vodafone Idea Ltd (VIL) stated because the decision handed by the corporate in September 2014 didn’t specify the securities premium, a vital modification is required to incorporate securities premium within the borrowing powers.
It additionally stated that after the amalgamation of erstwhile Vodafone India Ltd and Vodafone Mobile Services Ltd with the corporate in August 2018, “it is felt necessary that a fresh resolution be passed, encompassing the total overall borrowing limits of the company, post the amalgamation”.
VIL is exploring numerous avenues for elevating further funds to make sure enough money flows for secure ongoing operations.
“It is, therefore, proposed to increase the borrowing limits to enable the board to borrow monies, provided that the total amount so borrowed by the board shall not at any time exceed Rs 1,00,000 crore or the aggregate of the paid-up capital, free reserves and securities premium account of the Company, whichever is higher,” the submitting stated.
VIL may also search shareholders’ nod to create cost or mortgage or hypothecate on the corporate’s properties as much as the restrict of Rs 1 lakh crore.
The firm may also search the shareholders’ approval for a 10-year grasp service settlement (MSA) with Indus Towers and Bharti Infratel for renting cellular websites throughout India.
The transaction with Indus Towers, which is within the technique of merging with Bharti Infratel, will value VIL round Rs 10,000 crore each fiscal 12 months from the present fiscal 12 months onward.
The firm already has an MSA with Indus Towers. VIL estimates the transaction value of 10-year grasp service settlement with Indus Towers is prone to be greater than 10 per cent of its annual consolidated turnover, at round Rs 10,000 crore each year from the present monetary 12 months onward.
Hence, it’ll search the shareholders’ approval to go forward with the settlement as required beneath present rules.
Once the contract of Indus Towers is transferred to Bharti Infratel after the merger, the service will value VIL round Rs 10,000-Rs 15,000 crore, in keeping with the submitting.
The firm may also search shareholders’ approval to boost as much as Rs 25,000 crore by way of debt or fairness sale which was authorized by its board on September 4.
Loss-making VIL has been struggling available in the market for survival with a internet debt of over Rs 1.12 lakh crore, and the Supreme Court’s order upholding the correct of the federal government on statutory dues added to the monetary woes of the corporate.
According to the federal government’s declare, Vodafone Idea’s excellent dues stood at Rs 58,250 crore until 2016-17, out of which, the corporate has paid Rs 7,854 crore to the Department of Telecommunications.
VIL has been constantly shedding an enormous variety of subscribers as nicely.
It was the most important telecom service supplier within the nation in August 2018 on the time of merger with 43 crore cellular subscribers. The agency’s cellular consumer base has now dipped to 30.9 crore prospects. PTI