Vodafone Idea Considers Raising Debt; Seeks Financing From Local And Global Lenders

After confirming the relief from the government over its AGR-related dues, Vodafone Idea is said to be considering raising debt to boost growth, as reported by Bloomberg.

Vodafone Idea's move comes in the wake of the government’s decision to cap annual payouts for past spectrum fees.

As mentioned earlier, Vodafone Idea confirmed it had received communication from the DoT surrounding a relief that is only applicable to the AGR-linked dues; the telecom will still have to pay the spectrum linked dues.

But having struggled to generate adequate cash flow amid competition from Bharti Airtel and Jio, Vodafone is seeking financing from local and global lenders.

The cash-strapped operator is expected to use part of the proceedings to improve its network and better compete with the likes of Airtel and Jio.

The report adds that Vodafone Idea remains in talks with New York-based firm Tillmann Global Holdings surrounding a possible stake sale.

While Vodafone Idea is now considering raising debt, a potential equity investment has not been completely ruled out.

Earlier in the day, NDTV Profit spoke to various market experts in the wake of Vodafone Idea's AGR relief confirmation, including Centrum Broking's Piyush Pandey, who had indicated that the telecom company requires fresh fundraise even after the relief.

"Given that the spectrum dues amount to Rs 15,000 crore per year, Vodafone Idea, under current cashflow metrics, would probably need to raise close to Rs 30,000 - 40,000 crore. The company will need a tariff hike as well," he said.