UPDATE A group of lenders, led by the State Bank of India, has committed to lend money to Vodafone Idea (Vi), throwing it a critical lifeline. The action comes a week after the head of Bharti Airtel told the Economic Times of India that it will not allow the struggling Indian mobile network operator to use its 5G towers if it does not pay its debt to Indus Towers (INDUSTOWER: NSE). Bharti Airtel owns 48.7 percent of Indus Towers.
Other lenders involved in the loan of $1.6 billion include Punjab National Bank, Bank of Baroda, and Union Bank, according to Money Control. The telco is reported to owe Indus Towers nearly $1.2 billion. After paying its creditors, Vi plans to use the proceeds of the loan to roll out its 5G network and purchase spectrum at auction.
In April, Vi held a $2.16 billion follow-on Public Offering in India through a sale of new shares, saying that the funds would be used to expand its 4G network and launch its 5G network.
“They have raised money, now they should be able to pay up,” Mittal told the Economic Times. “They are making routine payments after the Indus board took a decision to shut the sites if the money does not come…otherwise they were only paying 80 percent,” while the remaining 20 percent was continuing to accumulate. The Vi board is also considering issuing equity shares and convertible securities to vendors.
By J. Sharpe Smith, Inside Towers Technology Editor
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