The decision was made during the company’s Extraordinary General Meeting (EGM) where the proposal for the issuance of securities up to $2 billion received 99.99% votes in favour of the move.
The second special resolution was for the issue of foreign currency convertible bonds and unsecured/secured redeemable non-convertible debentures along with or without warrants. This too received 99.99% of the votes in favour of the deal.
The company is expected to use the funds to pay down its fees owed to the department of telecoms following a ruling by the High Court that redefined the way Indian telcos calculate its adjusted gross revenues.
As a result, all three of India’s biggest telcos, Bharti Airtel, Reliance Jio and Vodafone Idea, left with an additional $8 billion in debt relating to its spectrum licence payments, the total of which for all three amounts to close to $13 billion. Of this, Bharti Airtel’s share is approximately $3 billion.
Together Bharti Airtel and Vodafone Idea have requested extended payments terms which would allow the companies the option to pay off their debt in instalments. However, the department of telecoms responded in December saying that payment is still due in full within three months, meaning that they have until the end of this month to settle its debt.
In related news, last month Capacity reported that Vodafone Idea is facing potential closure following India’s Supreme Court ruling forcing the joint venture to $4 billion.
According to the Financial Times, Kumar Mangalam Birla, owner of Idea Cellular, one half of Vodafone Idea, has said that the company may have to close if New Delhi does not intervene and stop the billon-dollar charge.
