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Vodafone Idea received shareholder approval for issuing ₹2,458 crore in preferential shares to Nokia and Ericsson, enhancing 4G and 5G rollout. Nokia and Ericsson will hold 1.5% and 0.9% stakes, respectively.
Vodafone Idea Limited (VIL) has received shareholder approval to issue preferential shares to telecom equipment providers Nokia and Ericsson. This move aims to address outstanding dues and support the company's 4G and 5G network expansion efforts.
During an Extraordinary General Meeting (EGM) held on July 11, VIL shareholders voted in favour of issuing preference shares worth ₹1,520 crore to Nokia Solutions and ₹938 crore to Ericsson India. The shares will be issued at ₹14.8 per equity share, totalling ₹2,458 crores.
Explore:Vodafone Idea Limited Share Price
Following the preferential allotment, Nokia and Ericsson will hold 1.5% and 0.9% stakes in Vodafone Idea, respectively. This issuance reduces the combined stake owned by promoters Aditya Birla Group and Vodafone Plc to 37.3%, while the Centre holds 23.2%, and the public holds 37.1%.
Vodafone Idea has been grappling with financial difficulties, including rising losses and increased interest and financing costs. The company reported a net loss of ₹7,675 crore for the March quarter, an increase from ₹6,418.9 crore in the same period last year.
The preferential share issue aims to ease vendor concerns over pending payments and secure support for expanding 4G coverage and rolling out 5G services.
With this equity issuance, Vodafone Idea has raised ₹24,000 crore of equity. This includes the conversion of 1,440 optionally convertible debentures (OCDs) by ATC India in March 2024, a follow-on public offer (FPO) in April 2024, and a preferential issue to promoters in May 2024. The company is also in discussions with lenders to secure ₹25,000 crore in debt funding as part of its fundraising roadmap.
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