The board of Vodafone Idea has once again approved the allotment of optionally convertible, unsecured, unrated and unlisted debentures (OCD) worth ₹1,600 crore to American Tower Corporation.
This comes after shareholders of Vodafone Idea had on November 21 approved issuing shares worth ₹1,600 crore to ATC Telecom Infrastructure, the Indian arm of ATC, on a preferential basis to settle the dues of the infrastructure vendor by converting the due amount into equity. However, this was conditional on the conversion of debt to equity by the Government of India. As the company has not received any communication from the Government on the conversion, the OCDs could not be issued to ATC within the validity period (15 days) of the shareholders’ resolution.
Funds raised from the new OCD issue will be used to pay amounts owed to ATC under the master lease agreement and some part of it will be used for general corporate purposes.
Indus Towers’ board had also warned Vodafone Idea in September of discontinuation of services over pending dues of nearly ₹7,000 crore. Vodafone Idea then sought softer repayment terms and Indus Towers agreed to staggered payments by July 2023
“The Board of Directors of Vodafone Idea Limited... has again approved Preferential Issuance of up to 16,000 Indian Rupee denominated optionally convertible, unsecured, unrated and unlisted debentures... aggregating up to ₹1,600 crores, convertible into equity shares at a conversion price of ₹10 per equity share, to ATC,” the filing said.
As on September 30 this year, Voda Idea’s total gross debt, excluding lease liabilities and including interest accrued but not due, stood at ₹2,20,320 crore.