Vodafone Idea (Vi) has a plan to clear its old merger debts by using shares owned by its promoters.
What the promoters are doing
The three Vodafone group promoters – Euro Pacific Securities Ltd, Omega Telecom Holdings Pvt Ltd, and Usha Martin Telematics Ltd – will set aside a total of 3.28 billion shares. These shares represent about 3% of Vi’s total equity.
How the money will be raised
The promoters will sell the shares gradually over the next five years. The cash generated, about ₹3,529 crore, will go straight to Vi to help settle legacy liabilities worth roughly ₹5,836 crore from the 2017 merger.
Breakdown of share allocation
- Euro Pacific Securities Ltd: 2.89 billion shares
- Omega Telecom Holdings Pvt Ltd: 256.8 million shares
- Usha Martin Telematics Ltd: 131.8 million shares
Why this matters to investors
Even though the promoters keep legal ownership of the shares, they cannot sell or transfer them except as allowed by the new agreement. The steady sale should provide Vi with needed funds without a sudden impact on its share price.
Remember, this is perspective, not prediction. Do your own research before making any investment decisions.