Amid the current financial crisis, Vodafone-Idea is likely to make a strategic announcement on Monday. The telco is reportedly set to rebrand. The development comes in the context of the telecommunications company’s decision to raise up to Rs 25 billion by selling shares and debt from new investors.
Vodafone Idea is owned by Vodafone plc and the Aditya Birla Group (ABG).
The rebrand is reportedly likely to have a combined brand identity and hype surrounding it, as the telco has so far been advertising the two brands separately, officials familiar with the matter said. Following the relaunch, the company is likely to introduce new packages to its subscribers across the country.
The company’s board of directors decided to raise funds by selling equity shares of up to Rs 15,000 crore and another tranche of up to Rs 15,000 crore through a public offering or private placement of non-convertible bonds. However, the total will not exceed 25 billion rupees, the company said in a statement to the stock exchanges.
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The relaunch comes even as parent Vodafone Group does not intend to put any stake in Vodafone Idea.
The company is also considering a credit enhancement to provide additional convenience to investors around the world to alleviate their Rs 1.7 trillion debt. Economic times reported.
Vodafone Idea’s Ebitda (earnings before interest, depreciation, taxes and amortization) of Rs 4,100 crore in the June quarter of fiscal year 21 was not enough to pay its capex, interest, deferred spectrum and gross income installments Adjusted (AGR), all of which amount to more than Rs 30 billion annually.
The company was hit hard by the Supreme Court ruling in October last year, when it was asked to pay Rs 58,254 million of AGR fees to the government. However, on Tuesday, the court gave all telecommunications companies 10 years to pay their past dues. Vodafone Idea has paid Rs 7,854 crore as AGR to the Department of Telecommunications.
In the first quarter of the financial year, Vodafone Idea’s quarterly loss increased to Rs 25,460 crore compared to Rs 11,643 crore reported in the March quarter of FY20.
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