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Telecom operator Idea Cellular is learnt to have appointed Bank of America Merrill Lynch and Citigroup to manage its Rs 3,500 crore fund raising through qualified institutional placement.
"Idea Cellular has appointed Bank of America Merrill Lynch (BoFA ML) and Citigroup to manage sale of equities to eligible bidders through QIP for raising Rs 3,500 crore," an industry source told PTI.
E-mail queries sent to Idea, BoFA ML and Citigroup did not elicit any response.
The board of Idea on February 14 approved raising of the capital through QIP.
The floor price in respect of QIP, based on pricing formula, has been fixed at Rs 86.84 per share and the company may give a discount of up to 5 per cent on the floor price, it added.
On January 4, the board had approved a proposal to raise up to Rs 6,750 crore. The company has already raised Rs 3,250 crore by allotment of shares to entities of promoter Aditya Birla Group (ABG).
The first tranche of fund raising has a bearing on the shareholding pattern of the company and also on its merger deal with Vodafone. The two parties have agreed that ABG will buy a minimum of 2.5 per cent of the merged entity from Vodafone for Rs 1,960 crore.
This equity sale transaction will reduce funding requirement on Vodafone Group from Rs 9,350 crore to Rs 7,390 crore to meet debt arrangement for the merged entity.
Infusion of Rs 3,250 crore, along with the proposed capital raise, will reduce Idea's net debt and as a result Vodafone's net-debt contribution to the merged entity will also be reduced.
The net debt of Idea as on December 31, 2017 stood at Rs 55,781.8 crore.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)