- Lenders led by SBI agreed to provide $3.5 billion debt to Vodafone Idea Ltd
- Union Bank of India and National Bank for Financing Infrastructure also joined
- Funds will be used to improve network and compete with Bharti Airtel and Reliance
A group of lenders led by State Bank of India agreed to provide about $3.5 billion of debt financing to Vodafone Idea Ltd. to help the mobile telephone operator rebuild its business, people familiar with the matter said.
Other local lenders in the consortium include Union Bank of India Ltd. and the National Bank for Financing Infrastructure and Development, the people said, asking not to be identified because the information isn't public.
Vodafone Idea, the country's third-biggest wireless operator in terms of users, plans to use some of the funds to improve its network and better compete with Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd., the people said.
Conditions regarding the funding include billionaire Kumar Mangalam Birla remaining as chairman throughout the tenure of the loan, which is nearly 10 years, and guarantees of repayment in case of default, the people said.
Representatives for Vodafone Idea and the banks didn't immediately respond to requests for comment.
Vodafone Idea has been working on raising debt to get on a firmer footing, with CNBC-TV18 reporting in May that the company, which is part-owned by the UK's Vodafone Group Plc, was in talks with lenders and that SBI was likely to lead a consortium. Vodafone Idea reported a smaller-than-expected loss of 37.5 billion rupees ($394 million) in the first quarter through June.
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Indian authorities earlier this year provided Vodafone Idea with a lifeline and better chance to attract investors by capping its past spectrum payouts. The government also last year converted about 370 billion rupees of outstanding dues into equity, lifting its stake to 48.99% from 22.6%.
The moves have helped Vodafone Idea's shares, which have climbed almost 40% this year to give the company a market capitalization of 1.6 trillion rupees.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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