In a bid to raise funds to pay off its debt, Vodafone Idea (Vi) is said to be approaching American private equity player Apollo Group Management (AGM), three people aware of the discussions told Economic Times.
Vi is said to be in talks with various private equity players to manage funds of up to $3 billion to honour its debt payment commitment of around Rs 225 billion by December 2021.
Vi is expected to pay spectrum outstanding and adjusted gross revenue (AGR) dues to the Telecom Regulatory Authority of India (TRAI) among others.
Vodafone Idea's net debt in Q4FY21 was Rs 1.8 lakh crore (pr Rs. 1.8 trillion up from Rs. 1.15 lakh crore in Q3FY21) on the inclusion of Rs 60,960 crore AGR liability, according to ICICI Securities report dated July 5, 2021. The reported loss in Q4FY21 was at Rs 7,022.6 crore.
The ICICI Securities report highlights that payment commitment of Rs 16,000 crore for annual spectrum payment and Rs 8,400 crore for AGR dues are coming up in March, April, 2022. It adds that Vi also needs to renew bank guarantees of Rs 7,000 crore (and needs to give some additional guarantee) in the coming months.
VI is hoping to sell its fixed line broadband subsidiary, optic fibre unit and data centres businesses to raise $ 1 billion. VI is also in talks with other private equity players such as TPG Global and Carlyle Group.
Edelweiss expects Vodafone Idea to post losses of Rs 6,526 crore in Q1.
Vi has approached the government to seek a one-year moratorium on payment of spectrum instalment of over Rs 8,200 crore, due in April 2022, reported PTI on July 1.
Vi is keen to secure entire funding from AGM, but reports indicate that AGM is asking the company for stringent covenants and promoters to give corporate guarantees to safeguard against defaults.
VI is said to be open to offering a substantial stake but at a valuation negotiated by it.
AGM's total assets under management (AUM) grew 7x over the past 10 to $455 billion by Q42020, as per its website.
Since its inception in India in 2009, Apollo has deployed nearly $2.8 billion across private equity, credit and real estate business (includes AION’s AUM).