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Vodafone Idea: Voda Idea dials new set of PE players for funding

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(Vi) is believed to have dialled a new set of US-based private equity players, including KKR and Carlyle Group, to secure around $2-2.5 billion (₹14,500-18,100 crore approx) funding via convertible instruments after its recent fundraising talks with the Oak Hill-led consortium went sour, people aware of the matter said.

The latest fundraising efforts, though, won’t be a cakewalk as the new prospective investors could push Vi’s co-promoters – UK’s Vodafone Plc and the Aditya Birla Group – to make some capital infusion to boost their comfort levels, one of the people said. The person added that the PE funds may also demand stricter covenants, including corporate guarantees from Vi in case of payment defaults as the debt-laden telco’s financials remain stressed and customer losses continue.

Vi’s latest pitches to multiple US private equity players, though, are at the exploratory level after its earlier talks with the Oak Hill consortium — which ET had reported – fell through amid differences over funding terms and valuations.

“They (VodaIdea) have reached out to us for initial talks, which needs to be deliberated in depth,” a person, close to a top US private equity fund told ET.

A person familiar with the discussions said Vi had also approached Cerberus Capital.

But a source close to Cerberus said it had been approached some months ago by the Oak Hill led consortium, but it is not engaged in any current discussions.

Cash Needs to Beef up 4G Ops

A KKR spokeswoman said the private equity firm “can’t comment on market speculation”. Spokespersons for Vodafone Group and Carlyle declined comment while Cerberus Cap, Vi and the Group did not reply to ET queries till press time.

Vi shares plunged over 3% intra-day before closing nearly 1.6% lower at Rs 10.07 on BSE on Monday

Cash-strapped Vi is trying to close a sizable initial funding deal with private equity players via hybrid convertible instruments, comprising bonds and warrants, with a linked equity option. The initial funding – to be used to ramp up Vi’s 4G networks and clear a portion of its dues—is part of the telco’s stated plans to raise an overall Rs 25,000 crore via a mix of debt and equity. Co-promoter Vodafone Group has previously said it won’t infuse any fresh equity into Vi.

Vi needs cash urgently to beef up 4G operations in its 16 priority circles to fight its financially-stronger adversaries

and Reliance Jio, arrest its steady loss of subscribers and also clear statutory dues to the government. It has Rs 50,400 crore of adjusted gross revenue (AGR) dues payable to the government over 10 annual instalments through March 31, 2031.

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