Indian telco Vodafone Idea is reportedly set to raise as much as Rs24.5 billion (US$293.2 million) via a preferential issue of equity shares to the local units of telecoms equipment suppliers Nokia and Ericsson.
According to ETTelecom, Vodafone Idea’s board has approved a scheme to issue around 1.6 billion equity shares – which have a face value of Rs10 each – at Rs. 14.80 per share to Nokia Solutions and Networks India Private Limited (“Nokia”) and Ericsson India Private Limited.
Nokia and Ericsson will take up to Rs15.2 billion and Rs.9.38 billion worth of shares respectively, which would give them respective stakes of 1.5% and 0.9% in Vodafone Idea, the report said.
Vodafone Idea said in a statement it will use the cash raised from the sale to invest in its planned 4G network expansion and 5G rollout.
“Nokia and Ericsson both have a long-term partnership with VIL, as key suppliers of network equipment, and this preferential allotment will enable VIL to clear part of their outstanding dues,” the company added.
The plan is still subject to approval by Vodafone Idea shareholders at an EGM scheduled for next month.
The plan also comes on the heels of the telco’s successful fundraising efforts in April, which included offering about $645.5 million in shares to anchor investors, and a follow-on public offer (FPO) worth US$2.2 billion.
