Vodafone Idea has started talks with US PE group Apollo Global Management to secure up to $3 billion in funding over the next three months, sources report. The telco is targeting a mix of debt and equity as it seeks to meet upcoming payment obligations.
Vodafone Group Plc and the Aditya Birla Group own 44.39% and 27.66%, respectively, in Vodafone Idea at the moment. Both of these companies are the Telco’s co-promoters. Both of them have so far refused to infuse any fresh equity. For now, it looks likely their stance won’t change. However, given its weak financial position, Apollo can push them to make some capital infusion to boost its comfort level before agreeing to the deal, said another person aware of the talks.
Apollo Global could impose stringent covenants, including corporate guarantees from Vi’s co-promoters. This will secure Apollo against potential payment defaults. Industry insiders, though, expect both the Birlas and Vodafone UK to oppose such terms on offering corporate guarantees.
VI is hoping to sell its fixed line broadband subsidiary, optic fibre unit and data centres businesses to raise $ 1 billion. VI is also in talks with other private equity players such as TPG Global and Carlyle Group.
Edelweiss expects Vodafone Idea to post losses of Rs 6,526 crore in Q1.
Vi has approached the government to seek a one-year moratorium on payment of spectrum instalment of over Rs 8,200 crore, due in April 2022, reported PTI on July 1.Vi is keen to secure entire funding from AGM, but reports indicate that AGM is asking the company for stringent covenants and promoters to give corporate guarantees to safeguard against defaults.VI is said to be open to offering a substantial stake but at a valuation negotiated by it. AGM’s total assets under management (AUM) grew 7x over the past 10 to $455 billion by Q42020, as per its website.Since its inception in India in 2009, Apollo has deployed nearly $2.8 billion across private equity, credit and real estate business (includes AION’s AUM).