Vodafone Idea is confident it can strike a fundraising deal with potential investors backed by a government program that provides much-needed relief to the debt-ridden mobile operator, its chief executive said on Wednesday.
Vodafone Idea, with net debt of Rs 1.91 lakh crore ($ 25.86 billion) and other government contributions of Rs 1.68 lakh crore, had expressed repeated concerns about its ability to stay afloat without federal aid.
Investors were waiting to see if New Delhi would ensure that at least three players exist in the telecom sector and also wanted the funding to be used for businesses rather than paying government contributions, said Ravinder Takkar, CEO of Vodafone Idea, in a video interview. .
“With this package all of these fears have to some extent been removed,” Takkar said, without specifying the names of the investors the company was in talks with or the timing of the fundraising.
“With this huge change, our business plans will have to be updated, which means our funding requirements will also have to be updated.”
Prime Minister Narendra Modi’s government last week approved an aid package for the cash-strapped telecommunications sector, including a four-year moratorium on wave charges owed to the state.
The telecommunications industry ran into trouble in late 2016 with the entry of billionaire tycoon Mukesh Ambani’s Reliance Jio, which sparked a price war that forced some rivals out of the market and turned profits into losses.
A Supreme Court ruling at the end of 2019 also added to the pain in the industry, imposing premiums on telecommunications companies of around $ 13 billion.
“There should be no doubt that … Vodafone Idea will exist, we will compete, we will survive, we will prosper,” Mr. Takkar said.
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