A consortium of investors comprising Oaktree Capital Management and Varde Partners has proposed investing at least $2 billion in cash-strapped Vodafone Idea Ltd (Vi) by buying hybrid debt securities, two people familiar with the matter said.
The consortium, led by Oaktree, is said to have offered $2-$2.5 billion to the telecom operator that owes more than ₹50,000 crore to the department of telecommunications in back fees.
Vodafone Idea’s financial position deteriorated sharply after India’s top court ordered it to pay billions of dollars in dues to the government in October last year.
The apex court, however, amended its order in September to allow the affected telcos to pay the dues over 10 years, giving the operator a breather.
Still, raising funds to upgrade its network and pay the government is critical for the company’s survival.
Spokespeople for Vodafone Idea, Oaktree and Varde Partners declined to comment.
In September, Vodafone Idea said it plans to raise ₹25,000 crore by selling bonds and shares. The fundraising process is, however, still in its initial stage. The telco plans to raise $2.5 billion by selling convertible bonds, and an equal amount by selling shares to institutional investors.
The stock rose as much as 4.4% earlier in the day.