Vodafone Idea Clears Dues: Shares Allocated to Nokia and Ericsson

Debt-ridden Vodafone Idea will allocate shares worth Rs 2,458 crore to Nokia India and Ericsson India to partially clear its dues. The shares are allocated at an issue price of Rs 14.80 per share. This preferential allotment aims to strengthen VIL's financial position and support its growth plans.

Debt-laden telecom operator Vodafone Idea has taken a crucial step to manage its finances by allocating shares worth Rs 2,458 crore to key vendors Nokia India and Ericsson India. The regulatory filing on Thursday revealed that the board of Vodafone Idea Ltd (VIL) has approved the preferential allotment of equity shares at a rate 35 per cent higher than the company's follow-on offer price, with a lock-in period of six months.

The preferential allotment involves about 166 crore equity shares of Rs 10 each being issued at Rs 14.80 per share. Nokia and Ericsson will be allocated shares worth Rs 1,520 crore and Rs 938 crore, respectively, pending shareholder approval at an Extraordinary General Meeting (EGM) scheduled for July 10, 2024. The telecom giant said the allotment would facilitate the settlement of part of its outstanding dues to the long-term partners.

Post-issuance, Nokia and Ericsson will hold 1.5 per cent and 0.9 per cent of VIL's equity, respectively. Meanwhile, VIL's promoters—Aditya Birla Group and Vodafone—will maintain a 37.3 per cent stake, the government's shareholding will decrease to 23.2 per cent, and the public will hold 37.1 per cent. This move is part of a broader strategy where the company seeks to raise Rs 49,000 crore in equity and debt to bolster its 4G and upcoming 5G network expansion.