Vodafone Idea Ltd (VODA.NS) said on Friday it would raise up to 250 billion Indian rupees ($3.41 billion) in fresh capital as the Indian telecom operator tries to pay off the hefty dues it owes to the government.
The loss-making carrier has been ordered by the country’s top court to pay roughly 500 billion Indian rupees ($6.81 billion) in dues to the government over a ten-year period and it has so far paid 78.54 billion rupees.
Vodafone said it would raise up to 150 billion rupees through debentures and an equal amount by issuing shares and warrants, but together will not exceed 250 billion rupees.
The plan to raise fresh capital also comes as the third largest telecom operator in India grapples with an erosion in subscriber base due to a price war triggered by Reliance Industries’ (RELI.NS) telecoms venture Jio Infocomm.
Vodafone lost 4.7 million subscribers in May alone, data from the country’s telecom regulator showed, while its gross debt stood at 1.19 trillion Indian rupees as of June end.
The joint venture between Britain’s Vodafone Plc (VOD.L) and India’s Idea Cellular had last month reported its eight straight quarterly loss and unveiled a plan to reduce costs by 40 billion rupees a year over 18 months.
The fund-raise plan will be considered at the annual general meeting of shareholders later this month, the company said.