Vodafone Idea (Vi) has secured an in-principle approval for a ₹14,000-crore loan from a group of lenders spearheaded by the State Bank of India (SBI). The news saw shares of the telecom company that were trailing in the red rocket into the green.
What Happened: The troubled telco has received informal pledges from multiple lenders, including Punjab National Bank (PNB), Bank of Baroda, Union Bank, and other public and private sector banks, reported Moneycontrol. The consortium is likely to release the funds in instalments once the transaction is finalised.
The funds will be utilised to settle dues with operational creditors, launch a 5G network, and bid for extra spectrum. Vi is vigorously working towards its larger goal of raising ₹25,000 crore following the successful FPO.
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On May 17, Vi CEO Akshaya Moondra stated that banks insisted on the telecom operator raising equity first before sanctioning loans. The company’s comprehensive plan includes raising ₹25,000 crore and additional non-fund-based facilities of up to ₹10,000 crore.
Despite a successful FPO and the telecom operator’s plan to aggressively invest in 4G expansion and 5G rollout, analysts predict further consolidation in the Indian telecom market due to the struggling telco's customer churn.
Price Action: Vodafone Idea’s share price was up 2.09% to trade at ₹16.14 on Tuesday afternoon.
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