Voda Idea faces Rs 4300 cr debt, 5G payouts in FY2Q, Indus wary of impact on dues: IIFL

economictimes.indiatimes.com:

Vodafone Idea (Vi) faces hefty payouts of Rs 4,300 crore towards debt and 5G airwave instalments in the current September quarter, which is likely to impact its future payments to Indus Towers, especially if the loss-making telco fails to close its long pending fundraise quickly, said IIFL Securities. “Basis Vi’s disclosures, it faces large payouts in 2QFY24...of the estimated Rs 4,300 crore outgo, Rs 2,600 crore is towards debt repayments (maturing) and a Rs 1,700 crore instalment related to 5G spectrum, which may exert pressure on payments to Indus, unless Vi raises funds,” IIFL Securities said in a note.

The brokerage added that a redemption of Rs 800 crore — out of the Rs 1,600 crore optionally convertible debentures (OCDs) issued to American Tower Corp’s India unit (ATC Telecom Infrastructure Pvt Ltd) — is also due in the fiscal second quarter. Vi though has the flexibility to skip payment, and the US tower company can subsequently exercise an option of converting the OCDs into equity.

Last week, the Boston-based tower company had informed the US Securities and Exchange Commission (SEC) that Vi’s OCDs would mature in two tranches of Rs 800 crore each on August 27, 2023 and August 27, 2024. The OCDs are to be repaid by Vi with interest, and convertible, at ATC TIPL’s option, into equity of Vi, and such equity would be freely tradable in the open market, beginning on the one-year anniversary of the date of issuance of the OCDs.

Accordingly, IIFL has cautioned that Indus’ receipts from Vi could fall short unless there is significant fundraising at Vi. At its fiscal first quarter earnings call last week, Indus’ top management said the tower company is in constant dialogue, urging its key customer, Vi to clear its