Vodafone India promoters ponder stake dilution to get capital for inflating dues

Vodafone Idea (Vi) promoters Aditya Birla Group and Vodafone Group intends to “cede control” the telco to a strategic investor in a “final bid for funds”.

Internal discussions moved in this direction after the promoters were “unsuccessful” in raising the required funds from financial investors, the sources added.

According to sources, “The initial plan was to get an investor in and, alongside, the two promoters would have invested some more equity, but that plan has not worked out so far."

 Talks are on with at least five investors (financial and strategic), including three US-based funds for the sale of shares and convertibles combination to raise capital for the telco to repay bank and government dues, they added.

Aditya Birla Group companies and Kumar Mangalam Birla possess 26 percent of Vi, while the telecom companies’ UK parent owns a 45 percent stake. The source noted that both are “open to doi9ng away with a majority stake or transfer control”.

The caveat, however, is that buyers pay a premium to market price so that the company gains “enough funding to take care of ballooning dues”.

Aditya Birla Group, Vi, and Vodafone Plc. did not respond to queries, the report added.

Vi  promises 58,254 lakh crore as adjusted gross revenue (AGR) dues to the Centre, of which it has paid 7,854 crore so far. The company has self-assessed the dues to be 21,533 crore.

However, the Supreme Court on July 23 dismissed a petition seeking re-computation of AGR dues.

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