Idea Cellular, one of India’s largest telecom operators, said the recently concluded sale of its shares to institutional investors, along with a recent fund infusion by the promoter, will reduce its net debt by Rs 6,750 cr.
“This equity raise of Rs. 3,500 crore along with recent infusion of Rs. 3,250 crore by Idea’s Promoter / Promoter Group will reduce Idea’s net-debt by approximately Rs. 6,750 crore,” the company said.
The statement seems to suggest that the entire amount raised would be used to retire debt, and not for meeting capital expenditure needs.
The company also said it was looking for a buyer for its 11.15% stake in Indus Towers, India’s largest telecom tower company. The stake is likely to be worth around $1.0 to 1.3 bln.
As part of the latest sale of the company’s shares to qualified institutions, Idea said it allotted 42.42 crore equity shares at Rs 82.50 each, raising Rs 3,500 crores.
“The Issue witnessed interest from a global investor base,” it said, adding that 44% of the shares were allotted to foreign investors.
“We continue to evaluate strategic options to monetize Idea’s 11.15% stake in Indus Towers. These proceeds will strengthen the financial position of the merged entity,” the company added.
Idea Cellular is expected to complete its merger with Vodafone’s India unit before the middle of this year, creating India’s largest telecom network by revenue, subscribers and spectrum.