Equity issue to govt is precondition for Vodafone Idea debenture issue

Last Friday, firm's Vi decided to issue 16,000 OCDs to American Tower Corporation and raise Rs 1,600 cr. Company has convened EGM on November 21 to approve the plan

Vodafone Idea (Vi) will have to issue equity shares to the government prior to issuing optionally convertible debentures (OCDs) to American Tower Corporation.

Last Friday, the board of Vi decided to issue 16,000 OCDs to the tower company and raise Rs 1,600 crore. Vi has convened an extraordinary general meeting (EGM) of shareholders on November 21 to approve the plan.

The EGM notice mentions conditions precedent for the issue of debentures. Among them is the conversion of Rs 16,133 crore of interest on adjusted gross revenue dues into equity for the government.

The notice states that Vi will have right to convert upto 8000 OCDs into equity shares if the share price of company for agreed period is equal or higher than price agreed by Vi and ATC. The conversion will happen at Rs 10 per share.

ATC will also have the right to request conversion of balance outstanding OCDs if any. If ATC does not request conversion then Vi will have to redeem those or find a buyer for purchasing outstanding OCDs.

Vi will redeem 8,000 OCDs by not later than June 30, 2023 and remaining OCDs if any shall be redeemed at the expiry of eighteen months from date of allotment of first tranche of debentures.