India

Vodafone-Idea borrowing; The CEO of the company says, “After the announcement of the central government…!”

The company will seek approval from its board of directors to raise funds again

After the government issues detailed guidelines on reform measures in the telecom sector, the company will seek the approval of its board of directors to raise funds again. In addition, the company’s promoters will have the opportunity to participate in this fundraising round. This has paved the way for the company to continue its business, Vodafone-Idea said.

Ravinder Takkar, Managing Director and CEO of Vodafone Idea, said, “The company is preparing to increase its investment in the business and enter the market. Only after the government issues direct guidelines will the company plan its business accordingly. ”

“We hope the guidelines will come in the next few days,” he said. Based on that, we will see how much funding we need to raise, how much it will cost, and how we will raise funds. The board of Vodafone Idea had earlier approved raising funds of up to Rs 25,000 crore. But the company has so far failed to find investors.

Revitalization of the telecom sector

Aditya Birla Group and Vodafone, the promoters of the company, had refused to keep much money in the company. Last week (Wednesday), the Union Cabinet decided to allow 100 per cent foreign direct investment (FDI) in an automated way with a four-year moratorium on payment of arrears to telecom companies in financial crisis. This long awaited decision has come as a great relief to the telecom sector. The empowerment of the telecom sector through a total of nine types of structural reforms was also welcomed by the industry. Therefore, the best response to the upcoming auction for 5G services is considered to be certain.

How to help?

Telecommunications companies like Vodafone-Idea, Bharti Airtel and Reliance Communications will no longer have to pay a single rupee of AGR arrears to the government for the next four years. This will reduce the financial burden on them and create and nurture employment opportunities in the sector. Also, a healthy competition will be promoted, said Union Telecom Minister Ashwini Vaishnav.

Increase in foreign investment limits

The Cabinet also decided to increase the FDI limit in the telecom sector from 100 per cent to 100 per cent. This is expected to alleviate the capital crunch felt by companies in the sector through many foreign investors.

 

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