Vi in talks with SBI for loan of Rs 15K-16K crore for capex needs: Report

Vodafone Idea (Vi) has approached the State Bank of India (SBI) for a loan of Rs 15,000-16,000 crore to meet its capital expenditure needs and fund its gear supply for the 5G rollout, a report in the Economic Times (ET) said.

The talks have reportedly been going on for over a month now and SBI is waiting to get clarity on the government's potential shareholding in Vi, the report added.

"The team is in talks with Vi, but it's at a nascent stage...some clarifications have been sought...on when the government will convert the telco's interest liability into equity and its business plans," a bank official told ET. The bank is only expected to give the plan a go-ahead after getting clarity on Vi's plans.

Vi's net debt in the second quarter stands at Rs 2.2 trillion. In September, Vi prepaid a short-term loan of Rs 2,700 crore to SBI. In Q1FY23, Vi's dues to banks and financial institutes stood at Rs 23,400 crore. In Q2, dues fell to Rs 15,080 crore. By September 2023, it has to pay Rs 9,300 crore to creditors.

The main delay in infusion by potential investors, according to the report, is due to ambiguity around the government's treatment of Rs 16,130 crore accrued interest on Vi's outstanding adjusted gross revenue (AGR) dues. The government might convert the dues into equity. But it is also awaiting Vi's announcement of plans to infuse capital before going ahead with the conversion.

Analysts have said that if the dues are converted to equity, the government might end up becoming the largest shareholder of the company owing up to 33 per cent.

However, the lenders are supportive of Vi as it has paid attention to reducing its debt.

IDEA Cellular Limited