Idea Cellular unveiled a plan to raise 6,750 cr ahead of Vodafone merger

Vastavam web: Idea Cellular today unveiled a plan to raise up to Rs 6,750 crore which will alter the shareholding pattern of the company and have a bearing on its merger agreement with Vodafone.The board of Idea Cellular today approved raising about Rs 3,250 crore from entities under the promoter Aditya Birla Group (ABG) and constituted a committee to evaluate potential routes for raising further capital of up to Rs 3,500 crore.”The Board of Directors of Idea Cellular Limited (Idea), today approved issuance of about 326.6 million equity shares, face value of Rs 10 per share, at a price of Rs 99.50 per share (in accordance with SEBI ICDR Regulations) on preferential basis,” Idea said in a statement.

The shares will be issued to entities under the Aditya Birla Group Birla TMT Holdings Private Limited, Elaine Investments Pte Ltd (Singapore), Oriana Investments Pte Ltd (Singapore), Surya Kiran Investments Pte Ltd (Singapore) and aggregate capital infusion will be of Rs 3,250 crore.The Aditya Birla Group will then own 26 per cent of the combined company and Idea’s other shareholders will own the remaining 28.9 per cent.The 2.5 per cent equity sale transaction between Vodafone and ABG, following change in shareholding pattern of Idea, will reduce funding requirement on Vodafone Group from Rs 9,350 to Rs 7,390 crore to meet debt arrangement for the merged entity.

“Vodafone’s stake in the combined entity in excess of 45.1 per cent will not be subject to any lock-up after closing and Vodafone will be free to sell the relevant shares without restrictions,” Vodafone said.The earlier joint announcement by the two companies called for locking of equity for three years, barring both ABG and Vodafone from selling share to a third party.