New Delhi: Cash-strapped Vodafone Idea (Vi) is in advanced negotiations with private equity companies to monetise its fibre assets and In-Building Solution (IBS) to raise ₹10,000-12,000 crore, people familiar with the matter said.
"The company is in advanced stage talks with a few PE players as it plans to sell the fibre assets and then lease back the infrastructure on a long-term basis," one of the people told ET.
The person said that the valuation for fibre assets was in the range of ₹10,000 crore to ₹11,500 crore while that of the IBS, used to provide connectivity inside buildings, could be around ₹500 crore.
"If all goes well, the deal could be concluded soon. The amount from the sale would provide the much-needed funds to Vodafone Idea," a second person said.
A Vi spokesperson declined to comment. The debt-laden telecom operator is re-energising talks to monetise its assets after facing a delay in raising fresh equity funding.
Vi Exploring Options
While talks for equity funding had been nearing conclusion with a US-based digital infrastructure firm, the deal could not go through as the potential investor backed out at the last moment, said the aware of the matter.
"There could be a delay of a few months for raising fresh equity funding as the company is now exploring options with other financial corporations in the US," said the person cited above.
In the interim, the telco is hopeful of selling its fibre assets.
India's only loss-making private telco had tried to sell its fibre assets and data centre business in 2019, but the deal could not be concluded due to differences over valuation. The government announced a relief package in September 2021 for the telecom sector, providing much-needed succour to the struggling operator.
The company has over 160,000 km of optic fibre and, since wired broadband is set to be a big revenue stream, Vi is hopeful of closing the deal at a good valuation.
The joint venture between UK's Vodafone Group Plc and India's Aditya Birla Group (ABG) has been battling cash flow issues, hindering capital expenditure and vendor payments. Hence, the company has been unable to seal 5G network equipment supply deals with vendors.
Consequently, Vi has been losing subscribers to rivals Reliance Jio Infocomm and Bharti Airtel, which have been expanding 5G coverage rapidly. To be sure, the September quarter saw the company lose the least number of users since the merger of Vodafone India and Idea Cellular in August 2018 to form Vodafone Idea.
The company's cash and cash equivalents declined to Rs 119.6 crore at the end of September from Rs 250 crore at the end of June.
Vi chief executive Akshaya Moondra had earlier said that discussions with potential investors will close in the December quarter, followed by debt funding from banks.
While Vi had earlier announced that it was looking to mobilise about Rs 20,000 crore from a mix of debt and equity but lately, the company has refrained from giving an update on its fundraising plans.
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