Voda-Idea will give shares worth Rs 2458 crore to Nokia India-Ericsson; Board approval, this is the reason
Voda-Idea: The Board of Directors of Vodafone Idea Limited today approved the allotment of about 166 crore equity shares of face value of Rs 10 each to its two major vendors, Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited, for a total profit of up to Rs 2,458 crore at an issue price of Rs 14.80 per share.
Vodafone Idea, a debt-ridden telecom company, will distribute shares worth Rs 2,458 crore to Nokia India and Ericsson India in order to pay off some of its debt. The board of Vodafone Idea Limited (VIL) has approved a preferential allotment of shares at a price that is approximately 35% higher than the company's follow-on offer. These shares will come with a six-month lock-in period. On Thursday, the company disclosed this information in a regulatory filing.
The company said in its statement, "The Board of Directors of Vodafone Idea Limited today approved the allotment of around 166 crore equity shares of face value of Rs 10 each to its two major vendors, Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited, for a total consideration of up to Rs 2,458 crore at an issue price of Rs 14.80 per share."
The telecom company said in a release that Nokia and Ericsson will participate in up to Rs 1,520 crore and Rs 938 crore respectively. The decision will be approved by VIL shareholders in the EGM to be held on July 10, 2024.
The company said in its filing, "Nokia and Ericsson have a long-term partnership with VIL as major suppliers of network equipment. This preferential allotment will enable VIL to repay part of its dues."
