The recast, if approved, could ease the financial strain on the telco that has a funded exposure of nearly ₹14,000 crore. SBI alone has an exposure of about ₹11,000 crore.
“After the government extended relief to the telco, lenders believe that uncertainty over its future is over for now,” said an official aware of the discussions. “And if the promoter chips in with more equity or raises fresh funds, easier repayment terms on loan dues could be a definite possibility.”
Vi has also informed lenders that it has revived talks with global investors for raising funds that will be used for infrastructure enhancement.
Shares of Vi climbed 6.11% to ₹10.42 on BSE on Tuesday.
Under the Reserve Bank of India’s (RBI) June 2019 restructuring framework, banks can allow renegotiation of loan dues to improve the company’s liquidity if the promoter brings in equity.
Aditya Birla Group’s Chairman Kumar Mangalam Birla is considering infusing some of his own capital – around $200 million – into Vi while the other parent Vodafone Group may explore monetising a small part of its 28.12% stake in Indus Towers and channel it into Vi.
Discussions with the lending banks come on the back of Vi accepting the government’s lifeline in the form of a standstill on spectrum and adjusted gross revenue (AGR) payments.
Better Bargaining Power
Vi gets to save about ₹1 lakh crore in total cash flows over the next four years and this, in turn, has given the company the necessary bargaining chip in its talks with global investors. “Vi’s senior management now has better negotiating terms and is meeting a slew of global investors,” said a senior industry executive aware of the development.
Last week, SBI Chairman Dinesh Khara said the government’s decision to offer a moratorium to Vi had given the telco a fresh lease of life.
“There is no reason for us to be really concerned. They have plans which they are working on in terms of raising capital, etc, and also increasing the investment in technology. So, that account is back on track,” Khara said last week.
SBI didn’t respond to ET’s queries. Vi also didn’t respond.
ET reported last month that the telco has held discussions to sell a minority stake to global private equity investors, including Apollo Global Management and Carlyle. The aim was to raise up to $1 billion, or approximately ₹7,540 crore, over the next two-three months
Vi’s lenders have been pushing the telco to raise funds to start clearing its upcoming financial dues starting December. Kotak Securities estimates Vi’s total borrowings at ₹23,400 crore and its annual payout toward interest on bank loans at ₹2,600 crore. The telco is also staring at a ₹6,000-crore payout toward redemption of non-convertible debentures (NCDs), also starting December. Vi also needs the money quickly to ramp up its 4G networks in its 16 priority markets to compete with financially stronger rivals Bharti
and Reliance Jio more effectively, and to arrest subscriber losses.
