Telecommunication major Vodafone has raised about Rs 8,800 crore (approximately $1.37 billion) through placement of non-convertible debentures and simultaneous rights issue to ramp up operations and bring down its debt, as a per a disclosure note.
Vodafone Spacetel Ltd, Vodafone Cellular Ltd and Vodafone South Ltd, the three units of the Vodafone India group, have raised Rs 5,500 crore ($857 million) through issuance and private placement of rated, unlisted, redeemable NCDs, and another Rs 1,300 crore ($202 million) via a rights issue.
The company, which has been facing taxation issues in India, will use the money to refinance debt, pay for the spectrum it had won in a March auction and also for expansion as it is gearing up to take on the competition in the space from its key rival Bharti Airtel besides Reliance Jio.
While Bharti Airtel is offering 4G services in many parts of the country including Chennai, Bengaluru, Pune, Chandigarh and Amritsar, Reliance Jio, the telecom unit of Reliance Industries, is expected to start services by December this year.
Vodafone is the second-largest telecom firm in the country behind Bharti Airtel.
Delhi-based Shardul Amarchand Mangaldas & Co acted as the sole transaction counsel, while HSBC and Standard Chartered Bank were the arrangers for the NCDs.
Vodafone Group entered India in 2007 by buying Hutchison Whampoa’s local cellular assets in a $11-billion deal and later bought out local partner Essar in the JV.
It directly and indirectly owned a combined 84.5 per cent of Vodafone India, the country’s second-largest telecom firm by users and revenue and last year bought out its other partners Max Group’s Analjit Singh and Piramal Enterprises to make it a wholly owned firm.
During April-February period of 2014-15 fiscal, Vodafone was the top MNC investor in India. Its investment of $1.5 billion in May 2014 was the biggest by any MNC, as per the data available with Commerce and Industry Ministry.
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