Vodafone Idea has received approval from board of directors for issuing Indian rupee-denominated debentures to telecom tower company ATC Telecom Infrastructure, one of its vendors, aggregating to Rs 1,600 crore.
The debentures will be issued in one or more tranches on a preferential basis. Vodafone Idea said the funds raised will be used to clear dues to ATC by Vodafone Idea under the master lease agreements and general corporate purposes.
According to a regulatory filing, Vodafone Idea said it will issue up to 16,000 Indian Rupees denominated debentures having a face value of Rs 10 lakh each, in one or more tranches, aggregating up to Rs 1,600 crore.
These debentures will carry a coupon rate of 11.2 percent per annum and they will be payable semi-annually during its tenure which is a maximum of 18 months from the date of issuance and allotment of the first tranche.
The debentures will be convertible into equity shares at a conversion price of Rs 10 per share to ATC Telecom Infrastructure (ATC) on a preferential basis. Vodafone Idea did not reveal the size of the stake to ATC. Media reports said American Tower will have around 5 percent stake in Vi.
The issue price will be at par of Rs 10 lakh per debenture each convertible into 1 lakh equity shares of the company at a conversion price of Rs 10 per share.
American Tower Company (ATC), a leading telecom tower company, is a non-promoter of the company.
In its filing, Vodafone Idea said: “The funds so raised shall be used to pay ATC amounts owed to ATC by the Company under the master lease agreements and, to the extent of any remainder, for general corporate purposes of the company.”
Vodafone Idea board has also approved the convening of an extraordinary general meeting of the company on November 21st to seek approval of shareholders for the aforesaid Preferential Issue.
On Thursday, market regulator Sebi approved the government’s proposal to convert dues of over $1.92 billion by telecom operator Vodafone Idea to equity.