Vodafone PLC raises stake in Vodafone Idea

As part of the deal in which the promoters of Vodafone Idea would contribute to the capital infusion into Vodafone Idea, its British parent Vodafone PLC raised its stake in the debt-ridden Vodafone Idea from 44.39% to 47.61%.

The deal was consummated through its subsidiary, Prime Metals. The promoters of Vodafone Idea were to contribute Rs.4,500 crore out of the Rs.14,500 crore capital infusion into Vodafone Idea Ltd.

Prior to this private placement of shares, Prime Metals (a wholly owned subsidiary of Vodafone PLC of UK) held 218.55 crore equity shares. This was equivalent to 7.61% of the equity share capital of Vodafone Idea Limited.

In the latest preferential allotment of shares, PML has acquired 57.10 crore equity shares of the company, taking its total shareholding in Vodafone Idea Ltd to 275.65 crore shares. This is pursuant to the preferential allotment.

Overall, Vodafone Idea board approved the allotment of 338.3 crore equity shares at Rs.13.30 per share. This translates into a total outlay of Rs.4,500 crore.
 

Out of the 338.33 crore shares, Vodafone Idea allotted 196.66 crore shares to Euro Pacific Securities, 57.10 crore shares to Prime Metals and a total of 84.59 crore equity shares to Oriana Investments. All these 3 companies are classified as belonging to the promoter group.

In the last few years, Vodafone Idea had struggled with mounting losses, the burden of huge spectrum and AGR fee payments to the DOT as well as loss of market in a tough telecom market. It had also not been able to invest in hardware and infrastructure required to maintain and enhance the quality of its service.

One of the first things that Vodafone Idea required under these circumstances was access to funds to bankroll its recovery.

Accordingly, the board of Vodafone Idea had approved the raising of Rs.14,500 crore. Out of this total fund raising plan, Rs.4,500 crore was to be raised via preferential allotment to the promoter groups and the balance Rs.10,000 crore was to be raised through debt or equity from the open market.

Vodafone has been jointly promoted by Vodafone PLC of UK and Aditya Birla group and had been formed by the merger of Vodafone India and Idea Cellular.