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Vodafone Idea shares: SBI-led lenders agree $3.5 billion debt financing, says report

Union Bank of India Ltd and the National Bank for Financing Infrastructure and Development are other local lenders in the consortium include, sources told Bloomberg.

Vodafone Idea shares: SBI-led lenders agree $3.5 billion debt financing, says report
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., sources 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, sources said.  Business Today could not independently verify the report.

Representatives for Vodafone Idea and the banks did not immediately respond to requests for comment, according to the report.

As per the report, representatives for Vodafone Idea and the banks did not immediately respond to requests for comment.

To recall,

Vodafone Idea has been working on raising debt to strengthen its financial position, 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 Rs 3,750 crore ($394 million) in the first quarter ended June.

Indian authorities earlier this year provided Vodafone Idea with a lifeline and improved its prospects of attracting investors by capping its past spectrum payouts. The government had last year also converted about Rs 37,000 crore of outstanding dues into equity, raising its stake to 48.99 per cent from 22.6 per cent.

The measures have helped Vodafone Idea’s shares, which have climbed almost 40 per cent this year, taking the company’s market capitalisation to Rs 1.6 lakh crore.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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