NEW DELHI: Vodafone Idea Limited (VIL) board on Friday approved issuing of Rs 1,600 crore debentures to ATC Telecom Infrastructure. The debt-laden telecom operator, in an exchange filing, said its board approved issuance of up to 16,00 crore rupee-denominated optionally convertible, unsecured, unrated and unlisted debentures having a face value of Rs 10,00,000 each. The debentures will be issued in one or more tranches on a preferential basis, and the funds raised will be used to pay amounts owed to ATC.
“The funds raised shall be used to pay ATC amounts owed to ATC by the firm under the master lease agreements and, to the extent of any remainder, for general corporate purposes of the company,” said the company. Currently, VIL’s tower dues stand at Rs 10,000 crore. Out of this, Rs 7,000 crore is owed to Indus Towers alone, while Rs 3,000 crore is owed to ATC.
The optionally convertible, unlisted, unsecured and unrated debentures (OCDs) will carry a coupon rate of 11.2% per annum, payable semi-annually during its term. Maximum OCD term will be of 18 months from the date of issue and allotment of first tranche of OCDs.
The company said the preferential issue would be subject to certain conditions, including inter-alia the approval of the shareholders of the company and the Government of India having converted the interest from deferment of Adjusted Gross Revenue and spectrum dues owed by the company.
According to the report, the Securities and Exchange Board of India (SEBI) approved the government’s proposal to convert VIL’s pending deals into equity. The conversion of interest on AGR dues, which stand at Rs 16,130 crore means the government will be holding close to 33% equity stake. VIL has been trying to raise funds for the past two year but failed to get any investors.