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Optionally Convertible Debentures to ATC Telecom Infrastructure
Vodafone Idea has recently taken a significant step towards strengthening its financial position by allotting 12,000 Optionally Convertible Debentures (OCDs) worth INR 1,200 crore to ATC Telecom Infrastructure. The OCDs have a face value of INR 10 lakh each and are due to mature in 20 years, unless they are converted earlier.
This move comes as a part of Vodafone Idea’s efforts to raise funds to clear its outstanding debt and to finance its operations, including the rollout of its 5G network. The telecom company has been struggling with a significant debt burden, and this latest development is expected to help alleviate some of the financial pressure.
Details of the Allotment
As per the terms of the allotment, ATC Telecom Infrastructure will have the option to convert the OCDs into equity shares of Vodafone Idea at a conversion price of INR 12.50 per share. The conversion can be exercised at any time before the maturity date of the OCDs.
Vodafone Idea has also mentioned that the allotment is subject to the receipt of approvals from the Department of Telecommunications (DoT) and other relevant authorities. The company expects to receive the necessary approvals soon and has stated that it will use the funds raised from the allotment for general corporate purposes.
Impact on Vodafone Idea’s Financial Position
The allotment of OCDs to ATC Telecom Infrastructure is expected to have a positive impact on Vodafone Idea’s financial position. The funds raised from the allotment will help the company to clear a part of its debt and to finance its capital expenditure. This move is also expected to improve the company’s credit rating and investor confidence.
Vodafone Idea has been under significant financial stress due to intense competition in the telecom industry and high debt levels. The company had reported a net loss of INR 7,218 crore for the quarter ended December 2021, and its debt stood at INR 1.8 lakh crore.
In conclusion, Vodafone Idea’s decision to allot 12,000 OCDs to ATC Telecom Infrastructure is a significant development for the telecom industry in India. The allotment is expected to help Vodafone Idea to improve its financial position and to continue its operations in a sustainable manner. With this latest development, Vodafone Idea is moving towards achieving its goal of becoming a financially stable and competitive player in the telecom industry.