Noida, Sep 11 (APAC Media): A consortium of lenders led by State Bank of India has approved a debt facility of around USD 3.5 billion for Vodafone Idea, according to a report citing people familiar with the matter.
The proposed financing is expected to provide the telecom operator with funds to strengthen its network infrastructure and support its expansion plans as it seeks to compete more effectively with Reliance Jio and Bharti Airtel.
The lending group is reported to include State Bank of India, Union Bank of India and the National Bank for Financing Infrastructure and Development (NaBFID). The loan could have a tenure of nearly 10 years, according to the report.
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People familiar with the matter said the financing is subject to certain conditions, including a requirement that Kumar Mangalam Birla continue as chairman during the loan tenure. The lenders are also reported to have sought repayment guarantees in case of a default.
Neither Vodafone Idea nor the lenders have officially commented on the reported loan approval.
The development comes as Vodafone Idea continues to work on strengthening its finances after years of debt-related pressure. The company has been seeking additional funding to accelerate capital expenditure and improve its network coverage and capacity.
Government measures have also provided the telecom operator with additional financial support. The Centre recently converted a substantial portion of Vodafone Idea’s outstanding dues into equity, taking its stake in the company to nearly 49 per cent.
The government had earlier announced measures aimed at providing relief to the telecom sector, including changes relating to spectrum and adjusted gross revenue liabilities.
The reported lending approval is significant for Vodafone Idea as the company faces intense competition in India’s telecom market, where operators are investing heavily in 4G and 5G infrastructure.
Vodafone Idea reported a quarterly loss of around Rs 3,750 crore for the quarter ended June, although the loss was lower than market expectations.
The company is expected to deploy fresh financing towards network expansion and other capital expenditure requirements. Analysts have said that improving network quality and increasing investments will be crucial for Vodafone Idea to retain subscribers and improve its financial performance.
The reported USD 3.5 billion facility could therefore give the company greater financial flexibility, but its ability to improve revenues, subscriber trends and cash generation will remain key to its longer-term recovery.
The loan approval has not yet been accompanied by an official announcement from Vodafone Idea or the participating lenders.
News Agency Inputs
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Disclaimer:Â This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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