Vi to issue debentures worth Rs 1,600 cr to ATC after condition waiver

OCDs to be converted into equity for preferential allotment to ATC, will carry 11.2% coupon rate and have a tenure of 18 months

The board of Vodafone Idea (Vi) on Tuesday approved the issue of optionally convertible debentures (OCDs) worth Rs 1,600 crore to ATC Telecom Infrastructure Private Limited after the latter waived a condition that was preventing its issuance.

The proposal was passed a second time as the previous shareholder resolution for the capital raise lapsed in December.

The issue of OCDs was conditional to the issue of 33 per cent equity to the government upon conversion of interest on adjusted gross revenue dues. However, since the equity issuance to the government is held up, the issue of OCD too got stuck.

Now ATC has agreed to waive the condition precedent, said a person aware of the matter. Funds raised through the debenture issue would be used for pay pending dues of ATC under the master lease agreement and any remaining amount will be used for other corporate purposes.

The plan involves the issue of 16,000 OCDs having face value of Rs 10 lakh each to raise Rs 1,600 crore. These would be converted into equity shares of Rs 10 each for allotment to ATC on a preferential basis. The OCDs will carry a coupon rate of 11.2 per cent and have a tenure of 18 months.

ATC is one of the two large tower companies and among several vendors which has been receiving delayed payments from Vi. Last week, tower company Indus Towers said it hasn’t received any new payment plan from Vi.

On October 21, the Vi board had approved the proposal for the first time and the company’s shareholders had approved the plan on November 21.