Vodafone Idea gets Rs 9272-crore booster shot ahead of 5G spectrum auctions

Vodafone Idea gets a boost for 5G spectrum auctions

Vodafone Idea gets a boost for 5G spectrum auctions

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Bombay: Shares of beleaguered Vodafone Idea (Vi) will be in the spotlight after two major announcements were made that are expected to give the company a shot ahead of the pivotal 5G spectrum auctions.

Vodafone Idea (Vi), promoted by Aditya Birla Group and Britain’s Vodafone, said the board has agreed to raise Rs 436.21 crore from its UK parent company against Rs 10.20 per unit. The decision comes as the cash-strapped company plans to further invest in its network and prepare for the upcoming 5G spectrum auctions.

The funds will be raised by issuing shares or warrants that can be converted into shares, the company said.

“The Board of Directors of Vodafone Idea Limited, at its meeting held on 22 June 2022, has agreed, inter alia, to raise funds for a total of Rs 436.21 crore through the issuance of: (a) up to 42,76,56,421 shares Shares of par value of Rs. 10/- each; or (b) up to 42.76.56.421 Warrants convertible into Shares, to Euro Pacific Securities Ltd. (a Vodafone Group entity and promoter of the Company), on a preferential basis in accordance with Chapter V of the SEBI (Capital Issuance and Disclosure Requirements) Regulations, 2018 (ICDR Regulations). The relevant date, in terms of determination of the ICDR regulation for determining the floor price of the preferential issue, in both cases is June 15, 2022,” Vi said in a scholarship application on Wednesday.

If the funds are raised through equities, the issue price is expected to be Rs 10.20 per unit, including a premium of Rs 0.20 per share; in the case of warrants, the issue price is expected to be Rs 10.20.

AGR contribution

Vodafone Idea also announced its decision to exercise its option to defer the payment of AGR-related duties worth Rs 8,837 crores for a period of 4 years.

In a BSE, the telecom operator said it had received a letter from the Department of Telecommunications (DoT) dated June 15, 2022, in which the regulator offered a four-year moratorium on all AGR-related contributions until fiscal year 2018-19 that had not been paid. included in the decision of the Supreme Court of September 1, 2020, which can be exercised within 15 days, i.e. by June 30, 2022.

The said DoT letter also provides the company with an option for stock conversion of interest expense upfront for these AGR-related rights for which a 90-day period is provided from the date of the said DoT letter, the filing said.

“We would like to inform you that at its meeting today, June 22, 2022, the Board of Directors of the Company has approved the exercise of the option to defer the AGR-related contribution for a period of four years with immediate effect, in accordance with said DoT Letter. The amount of the AGR related duties as stated in the said DoT letter is Rs. 8,837 crores,” it went on to say.

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