Banks have completed the techno-economic evaluation (TEV) of Vodafone Idea and it is in discussions for landing the ₹35,000-crore additional financing required for its capital expenditure needs, the company said.
“Vi is in active discussions with banks to secure debt funding. A key milestone in this process was the completion of the independent techno-economic evaluation initiated by the banks. This has been completed. The TEV report has always been a standard requirement from the banks, and while it was conducted previously, this time it was updated,” said a spokesperson in response to queries from Mint.
The banks sought the evaluation from a leading consultancy to establish the telecom company’s creditworthiness and the quantum of loans that could be extended to it, said an executive aware of the process.
However, Vi did not mention whether the banks had agreed to the loan. Vi has sought funds from public sector non-banking financial companies Rural Electrification Corporation and Power Finance Corporation, according to a report in The Economic Times on Tuesday. Vi is yet to respond to queries on the matter.
In talks with a consortium of banks
The No. 3 carrier by subscribers has been in discussions with a consortium of banks led by State Bank of India for raising ₹25,000 crore in term loans and another ₹10,000 crore in non-fund based loans or bank guarantees. The loans will form part of the ₹55,000 crore capex plan it has sketched out for the next three years, for spending on building its 4G network and launching 5G services in key circles.
The move follows the telco raising ₹18,000 crore through a follow-on offer in April, which is part of a ₹24,000 crore fund raise through equity. Vi chief executive officer Akshaya Moondra had told analysts last month during the Q1 earnings call that equity raise was the first ask from the banks for debt funding, and once that was done, it hoped to close the discussion with banks. The debt from banks and financial institutions reduced by ₹4,550 crore during the last one year. At present, Vi’s bank debt is ₹4,650 crore.
Despite reduction in external debt, Vi faces a massive ₹2.09 trillion debt which is owed to the government in the form of deferred spectrum payment obligations of ₹1.39 trillion and adjusted gross revenue (AGR) liability of ₹70,320 crore. Spectrum payments to the government are likely to rise going forward after Vi bought airwaves worth ₹3,510 crore in the June 2024 auctions. The department of telecommunications had asked carriers to make payments in July, where Vi opted to pay in installments and paid up the first one of ₹315 crore, Airtel paid ₹595 crore and Reliance Jio paid ₹95.72 crore.
