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regular-article-logo Saturday, 22 June 2024

ATC to convert over Rs 1,400 crore worth of debentures of Vodafone Idea into equity

In February 2023, VIL issued these debt instruments worth Rs 1,600 crore to ATC Telecom Infrastructure Pvt Ltd (ATC) against its dues. It was then estimated that VIL owed ATC around Rs 2,000 crore

Our Special Correspondent Mumbai Published 20.03.24, 10:19 AM
Representational image

Representational image Sourced by the Telegraph

ATC, the telecom tower firm, is converting a little over Rs 1,400 crore worth of optionally convertible debentures (OCDs) issued by loss-making telco Vodafone Idea Ltd (VIL) into equity.

In February 2023, VIL issued these debt instruments worth Rs 1,600 crore to ATC Telecom Infrastructure Pvt Ltd (ATC) against its dues. It was then estimated that VIL owed ATC around Rs 2,000 crore.

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Subsequently, the redemption period for the first tranche of the bonds worth Rs 800 crore was extended by 12 months.

In a regulatory filing on Tuesday, VIL said that as per the terms of OCDs, ATC has sought the conversion of 14,400 OCDs amounting to Rs 1,440 crore into 144 crore shares of the telco.

``VIL will take necessary actions to allot the equity shares to ATC pursuant to the conversion of the said OCDs, as per the terms of the OCDs,’’ the company added.

VIL pointed out that ATC is one of the largest infrastructure service providers to
the company and both entities have a long-term relationship.

ATC had subscribed to OCDs, the proceeds of which were primarily utilised against the payment of dues to the tower company.

VIL added that the conversion price of Rs 10, at the time of OCD issuance, was at a premium to the then prevailing market price of its shares.

The VIL share on Tuesday ended at Rs 12.86, a drop of 2.35 per cent over the last close in line with the weak trend in the stock markets.

Last month, the board of VIL approved a Rs 20,000 crore fund-raising proposal through equity and equity-related instruments.

The mobilisation will also see participation from its promoters. The central government is the single largest shareholder in VIL with a holding of 33.1 per cent after it converted the accrued interest towards statutory dues into equity in 2023.

VIL’s promoters — the Aditya Birla group and Vodafone Plc — jointly hold 50.3 per cent equity in the company.

The company will cumulatively raise Rs 45,000 crore with the rest coming through debt.

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