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SBI-Led Lenders Approve $3.5 Billion Loan For Vodafone Idea
A group of banks may lend Vodafone Idea about $3.5 billion.
State Bank of India is reportedly leading the group.
Vodafone Idea is a large mobile phone company in India.
It wants to use the money to improve its network.
Better service could help it compete with Airtel and Jio.
The reported loan would last for nearly 10 years.
One condition is that Kumar Mangalam Birla stays chairman during that period.
The Indian government has also helped the company by exchanging some of its debt for ownership.
Vodafone Idea’s representatives and the banks had not publicly confirmed the report when it was published.
A lender group led by State Bank of India reportedly approved about $3.5 billion in debt financing for Vodafone Idea.
The consortium reportedly includes Union Bank of India and the National Bank for Financing Infrastructure and Development.
Vodafone Idea plans to use part of the financing to improve its network and compete with Bharti Airtel and Reliance Jio Infocomm.
Reported loan conditions include Kumar Mangalam Birla remaining chairman for nearly 10 years and providing repayment guarantees if Vodafone Idea defaults.
The Indian government has supported Vodafone Idea by converting about 370 billion rupees of dues into equity and capping past spectrum payouts.
- Who
- Vodafone Idea and a lender group led by State Bank of India, with Union Bank of India and the National Bank for Financing Infrastructure and Development reportedly participating.
- What
- The lenders reportedly approved about $3.5 billion in debt financing for Vodafone Idea.
- Where
- India.
- When
- The report gives no exact approval date; it references the company’s first-quarter results through June and earlier government measures.
- Why
- The financing is intended to help Vodafone Idea rebuild its business, improve its network and compete with other major wireless operators.
Key facts
- Reported financing
- About $3.5 billion in debt financing
- Lead lender
- State Bank of India
- Other reported lenders
- Union Bank of India and the National Bank for Financing Infrastructure and Development
- Loan tenure
- Nearly 10 years
- Latest reported loss
- 37.5 billion rupees, or about $394 million, in the first quarter through June
- Government equity stake
- The government’s stake rose to 48.99% from 22.6% after converting about 370 billion rupees of dues into equity
- Share performance
- Vodafone Idea shares had risen almost 40% this year, according to the report
Sources
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