Vodafone Idea shares rose 5 per cent on NSE (National Stock Exchange), after company announced that they intends to raise Rs 2,000 crore, Vi fund raising announcement came after VIL (Vodafone India Ltd) parent Vodafone PLC offered to unload its entire remaining stake of 3 per cent in Indus Towers.
The Vi lost the momentum it had gained in the morning hour when it touched day high level of Rs 8.79 per share at opening bell, the stock quickly started to tumble down and went to touch the day low of Rs 8.10 per share on the bourses.
The Vodafone idea shares were trading at Rs 8.11 per share on the bourses, with a decline of 3.68 per cent on the bourses amounting to a Rs 0.31 per share on the Indian Exchanges.
Pay back existing lenders
The proceeds from the sale of a 3 per cent stake in Vodafone PLC will be used to pay back the company's outstanding debts to its current lenders, which total USD 101 million.
'Indus has a security over the residual proceeds from the placing to guarantee obligations from Vodafone Idea Limited (Vi) to Indus under the Master Services Agreements (MSAs) in accordance with the terms of the security arrangements entered into between Vodafone and Indus,' the statement said.
Vodafone fundraising
Regarding fundraising, Vodafone Idea stated that it intended to raise Rs 2,000 crore by giving preference to one or more Vodafone group promoter entities in the issuance of equity shares and/or convertible securities.
'Vi would use the capital raise's proceeds to settle Indus's outstanding MSA debt. If any Indus shares were left over after Vodafone's outstanding debts were paid off, they and any money that wasn't used by Vodafone to buy more VIL stock would be available to Indus to secure VIL's commitments under the MSAs, the statement stated.
