Voda Idea could abandon its plan to monetize its assets

MUMBAI : Vodafone Idea Ltd will reconsider the terms of its planned fundraising and may abandon an asset monetization plan, said managing director and CEO Ravinder Takkar, after last week’s telecommunications bailout erased a point of question about its survival.

On September 16, the government announced a four-year moratorium on regulatory fees, authorized 100% of foreign direct investment in telecommunications automatically, and redefined adjusted gross income (AGR).

“We are still awaiting the finer details of the recently announced telecom package, but it is fair to say that most investor concerns about the company’s future have been resolved,” Takkar said in an interview. “The government has made it clear that it wants to ensure the viability of the industry, and I can say that discussions with investors will be very different from what we have had in the past, regardless of the investor (s) ultimately,” he added.

Vodafone Idea, which decided to sell its fiber-optic assets and data centers last year to raise funds, could also put the plans on the back burner. “I would say asset sales will be pretty low on the priority list right now, and the focus is on improving the customer experience,” Takkar said.

He also said the fundraising process will begin in the coming months and will be linked to a new business plan the company will develop, once details of a potential conversion of some of its government contributions into equity. clean will be clear.

On September 4, the board of directors of Vodafone Idea approved the plan to increase to ??25,000 crores.

Over the past year, the telecom operator has held talks with several strategic and financial investors to raise funds through a mix of equities and hybrid debt.

Negotiations are invariably stuck on the question of its survival, however, given its annual regulatory dues of ??25,000 crore over the next decade.

However, with the implementation of government relief measures, developers who previously refused to invest more in the business may be rethinking.

Mint reported on September 21 that Aditya Birla Group and Vodafone Plc are exploring the possibility of a new equity injection, which would bolster Vodafone Idea’s finances and boost market confidence ahead of an external fund injection.

“We will seek approval from the board of directors to raise funds and our promoters will have the chance to participate in the fundraiser if they wish,” said Takkar.

“All the money raised will be used for technological upgrading and infrastructure improvement and will allow us to remain competitive as we always have done,” Takkar added.

Vodafone Idea has been bleeding subscribers for several quarters.

In June, it lost around 4.28 million subscribers, reducing its user base to 273 million, while rivals Reliance Jio and Bharti Airtel added 5.46 million and 3.81 million users, respectively.

“Almost 90% of the spectrum is now deployed for 4G services, and despite the overall loss of customers, we have added new subscribers to the 4G user base, and we expect the numbers to stabilize,” Takkar said.

“Some of our customer losses happened because we were basically two companies and also because there were quality of service issues. Our customer base is now much more stable and as we invest more we are optimistic that the situation will significantly improve, ”he added.

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Julio V. Miller

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