Vi dials lenders for Rs 23,000 cr term loans, seeks Rs 10,000 cr in bank guarantees
Vodafone Idea (Vi) has proposed borrowing Rs 23,000 crore from banks in term loans — and sought another Rs 10,000 crore in bank guarantees — as the country's third-largest telco looks to line up the capital expenditure necessary to compete effectively with bigger rivals Reliance Jio and Airtel in a telecom market that had once threatened to slip into a duopoly.
The Vodafone Plc and Aditya Birla Group joint venture, which recently satisfied long-pending demands from the lenders to commit more equity to the business, submitted the term loan proposal at a meeting of a State Bank of India (SBI)-led banking consortium a few days ago, people familiar with the matter said. The loans sought are part of the targeted Rs 55,000-crore ($6.6 billion) capex funding Vi needs to boost 4G coverage and kickstart greenfield 5G rollouts in key markets. In its presentation to lenders, Vi said it needs the money to upgrade its mobile broadband network infrastructure in its 17 priority markets.
Techno-economic viability report:
Banks will now seek a technoeconomic viability (TEV) report from a top consultancy firm to assess Vi’s creditworthiness before taking a call on sanctioning the loan.
«Vi has now formally approached banks. The presentation was essentially giving details of what it plans to do in future, such as infrastructure upgrades,” a person aware of the discussions told ET. “Banks have taken note of it and now moved to a TEV, which will take a couple of months.»
SBI did not respond to an ET email seeking comment. Queries to
