NEW DELHI: American Tower Corporation (ATC), a telecom infrastructure provider, has opted to convert its Rs 1,440 crore due to Vodafone Idea (VIL) into fully paid-up equity shares of VIL. With this, ATC will have nearly 2.95% stake in Vodafone Idea, country’s third-largest telecom service provider.
Currently, the Government of India holds a 35.8% stake in the company, and the promoters, Vodafone Plc. and Aditya Birla Group, hold 28.5% and 17.5% stakes, respectively.
“ATC to convert optionally convertible debentures (OCDs) issued by VIL amounting to Rs 1,440 crore into 144 crore fully paid-up equity shares of VIL. VIL will take necessary actions to allot the equity shares to ATC pursuant to the conversion of the said OCDs, as per the terms of the OCDs,” said Vodafone Idea in a statement.
ATC is one of the largest infrastructure service providers for VIL, and both entities have a long-term relationship. Since the telco failed to pay the dues to ATC due to a lack of funds, it issued OCDs worth Rs 1,600 crore to ATC against its dues in February 2023. In August, Vodafone Idea extended the redemption period of its OCDs allotted to ATC by one year. The conversion price of Rs 10 at the time of OCD issuance was at a premium to the then-prevailing market price of VIL shares.
“In the spirit of this partnership, ATC subscribed to OCDs amounting to Rs. 16 billion, proceeds of which were primarily utilized against payment of dues to ATC. The conversion price of Rs. 10 at the time of OCD issuance was at a premium to the then prevailing market price of VIL shares,” said the company.
Vodafone Idea, the loss-making joint venture between the UK’s Vodafone Plc and India’s Aditya Birla Group, has been struggling to raise funds for more than three years now. Due to a lack of capital, the company has been unable to stem its subscriber losses to its competitors, Reliance Jio and Bharti Airtel, and roll out its 5G services in the country.