Idea Cellular on Monday said it has raised Rs 3250 crore by allotting preferential shares to its promoters the Aditya Birla Group. The raised capital will be used to repay debt.
In early January this year Idea had announced that the company is planning to raise a total of Rs 6750 crore – Rs 3250 from allocating preferential shares and Rs 3500 crore from further Preferential Issue, Qualified Institutional Placement (QIP) or Rights Issue. The same was approved by Idea’s shareholders in the Extraordinary General
Meeting held on 30th January, 2018 resulting to this allotment of shares.
The company issued 326.6 million shares in this manner at a price of Rs 99.50 per share to promoters including Birla TMT Holdings Private Limited / Elaine Investments Pte. Ltd. (Singapore) / Oriana Investments Pte. Ltd. (Singapore) / Surya Kiran Investments Pte. Ltd. (Singapore).
Post this preferential allotment, the share holding of the promoter group in Idea rose to 47.2% from 42.4%.
“This equity infusion reiterates the Group’s commitment towards the telecom business and confidence in its growth prospects. Idea is in the process of bringing a world class 4G network to villages, towns and cities across India that will contribute to the transition of the Indian populace towards a digital lifestyle. With the planned fund raise combined with the recently announced sale of Idea’s towers and potential monetization of the Indus stake, the Company will be better capitalized to participate in the growth opportunities offered by the sector,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group.
The equity infusion by the Promoter Group of Rs. 3,250 Crore, along with the proposed further capital raise of up to Rs. 3,500 Crore, will reduce Idea’s net-debt and as a result Vodafone’s net-debt contribution to the merged entity will also be reduced by an equivalent amount.
Additionally, the recently announced sale of Idea’s and Vodafone India’s standalone towers to American Tower Corporation for an aggregate enterprise value of Rs. 7,850 Crore and the potential monetization of Idea’s 11.15% stake in Indus Towers, will further augment the long term capital resources of the Company.
“These proceeds will significantly strengthen the balance sheet of the merged entity (Idea and Vodafone India) creating a resilient entity for the future,” said the company in a statement.