New Delhi: Vodafone and Aditya Birla Group will infuse over Rs 18,000 crore into India's largest telecom operator Vodafone Idea Ltd through a rights issue to arm the company with firepower to take on market competition intensified by Reliance Jio.
The board of directors of Vodafone Idea Ltd on Wednesday approved Rs 25,000 crore fund-raising plan by way of rights issue to existing eligible equity shareholders, the company said in a regulatory filing.
"The board has, considered and approved the offer and issue of fully paid-up and/or partly-paid up equity shares of the company and/or other securities convertible into equity shares of the company, including but not limited to, compulsorily convertible debentures, for an amount aggregating up to Rs 25,000 crore by way of a rights issue...," it said.
The promoter shareholders -- Vodafone Group and Aditya Birla Group -- have reiterated to the board that they intend to contribute up to Rs 11,000 crore and up to Rs 7,250 crore, respectively as part of such rights issue, it added.
The promoter shareholders have also said that in case the rights issue is under-subscribed, each of the promoter shareholders reserves the right to subscribe to part or whole of the unsubscribed portion, subject to applicable law.
The board has authorised the Capital Raising Committee to decide the nuances of the Rights Issue, including the instrument, issue price, rights entitlement ratio, the record date, the timing of the Rights Issue and other matters.
Vodafone holds 45.1 percent stake in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group controls 26 percent and Idea shareholders own 28.9 percent.
The mega merger was announced a few months after the entry of the deep-pocketed Reliance Jio, whose aggressive pricing and freebies impacted the financials of the entire industry, which has even seen bankruptcies and asset sell-offs. Jio has amassed of 280 million subscribers as on end of December 2018.
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Updated Date: Jan 23, 2019 19:22:27 IST