New Delhi. Debt-ridden telecom company Vodafone-Idea (VIL) on Thursday announced the allotment of shares worth Rs 2,458 crore to its vendors Nokia India and Ericsson India to partially repay its dues. Vodafone Idea said in a notice to the stock exchange that its board of directors has approved the preferential share allotment at a price about 35 percent higher than the company’s follow-on issue price. It comes with a six-month ‘lock-in’ period.
According to the information, “The Board of Directors of Vodafone Idea Limited today approved the preferential allotment of about 166 crore shares of face value of Rs 10 each at the issue price of Rs 14.80 per share for a total consideration of up to Rs 2,458 crore to its two major vendors Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited.” According to the telecom company, Nokia and Ericsson will acquire stakes of up to Rs 1,520 crore and Rs 938 crore respectively. However, for this, approval of VIL shareholders is mandatory in the general meeting to be held on July 10.
According to the information given to the stock market, “Both Nokia and Ericsson have a long-term partnership with VIL, as they are major suppliers of network equipment. This preferential allocation will help VIL to pay part of its dues.” VIL Chief Executive Officer (CEO) Akshay Mundhra said, “VIL is moving forward on its growth journey … In such a situation, support from key stakeholders is important. The agreement with Nokia and Ericsson confirms the long-term partnership of these vendors with the company and sets the stage for the next phase of our growth.”