Idea Cellular announced it will raise INR67.5 billion ($1.06 billion) to strengthen its contribution to the balance sheet of its merged venture with Vodafone, ahead of an expected completion in H1 2018.
At a board meeting, Idea executives agreed to raise INR35 billion from equity sales to largest shareholder Aditya Birla Group (ABG) – taking its stake in Idea from 42 per cent to 47 per cent – and appointed a committee to assess how to secure a further INR32.5 billion.
In a joint statement with Vodafone Group, Idea said the new funds would be used alongside the proceeds from the sale of the two companies tower businesses in India to strengthen the balance sheet of the joint entity. The companies added the approvals process was progressing to schedule, with only clearances from the National Company Law Tribunal and Department of Telecommunications outstanding.
The timeline originally slated deal completion by the end of 2018, but the two are now targeting the first half given the approvals gained so far. When complete the merged entity will be the largest operator by connections in India, overtaking current market leader Bharti Airtel.
Since the original agreement was announced in March 2017 Idea reported falling revenue and a bottom-line loss of INR11.76 billion for its fiscal Q2 (calendar Q3 2017) – the latest results reported by the company.
During December, rumours emerged Idea’s financial woes could lead to a renegotiation of the terms of the deal – a report rebuffed by Vodafone.