Voda Idea announces Rs 55k cr investment to address investor concerns after AGR judgement
Writer Admin
NEW DELHI: After facing a hammering on the stock markets following an adverse judgment by the Supreme Court on the AGR issue on Thursday, embattled telco Vodafone Idea (VIL) on Sunday sought to assuage investor sentiments, promising a “smart turnaround” by lining up Rs 55,000 crore of new investments, which includes a Rs 30,000 crore spend on network equipment purchased from Nokia, Ericsson, and Samsung.
The company, which has to cough up nearly Rs 70,000 crore towards its AGR dues, said that it has “kickstarted the investment cycle” as part of a VIL 2.0 plan that will now see it raise funds through debt after it mopped up Rs 24,000 crore mainly through a follow-on public offer and also infusion by promoters.
“We are committed to invest in emerging network technologies to provide a best-in-class experience to our customers. We have kickstarted the investment cycle. We are on our journey of VIL 2.0 and from hereon, VIL will stage a smart turnaround to effectively participate in the industry growth opportunities,” CEO Akshaya Moondra said, calling it the company’s largest capex investment.
The telco, which has the govt amongst its promoters apart from Kumar Mangalam Birla’s Aditya Birla group and Vodafone Plc of the UK, said it will spend Rs 30,000 crore over the next three years through the deal with the three network equipment providers.


“The deal marks the first step towards the rollout of the company’s transformative three-year capex plan of Rs 55,000 crore. The capex programme is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets, and capacity expansion in line with data growth. The company has continued with its existing long-term partners Nokia and Ericsson and also onboarded Samsung as a new partner,” the company said, with Moondra adding, “We look forward to work closely with all our partners as we move into the 5G era.”

The company said that capex is currently being funded out of the equity raise. “For the long-term capex, the company is in advanced stage of discussions with its existing and new lenders to tie up Rs 25,000 crore of funded and Rs 10,000 crore of non-fund-based facilities. One of the major steps in this process was the completion of techno economic evaluation of the company’s long-term projections by an independent third party, which was recently completed. The report has been submitted to all the banks and financial institutions. Basis this report the banks will now progress with their internal evaluation and approval processes.”


Moondra said that the investments into the network will allow the telco to quickly capitalize on the “latest state-of-the-art equipment” that will help it offer enhanced customer experience. “Further, the learnings and insights obtained by the vendors in the Indian market over the last two years, will enable the company to embark on a more flexible and modular rollout plan by customising the services for all advanced technologies (4G & 5G). In addition, the new equipment will also lead to efficiency gains in energy and thus lower operating costs. The supplies against these new long-term awards will start in the coming quarter. The top priority for the Company is to expand the 4G coverage to 1.2 billion Indians.”


On Thursday, the apex court had rejected the curative petition filed by Vodafone Idea and Airtel seeking re-calculation of their cumulative AGR dues of over Rs 1 lakh crore that they were ordered to pay by the court in Oct 2019. A bench comprising Chief Justice DY Chandrachud and Justices Sanjiv Khanna and BR Gavai also rejected the plea of the telcos seeking to list the curative petitions for open court hearing.

 

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