New Delhi, March 12: Facing a cash crunch, Vodafone Idea has secured an equity commitment of $1 billion (around Rs 8,300 crore) from investors.

The telecom company received a "soft commitment" from investors which also includes funds committed from promoters as well, according to people aware of the development. The company aims to use the funds to pay vendors and towards 4G and 5G capital expenditures. PM Narendra Modi To Lay Foundation Stone of Three Semiconductor Projects Worth 'Rs 1.25 Lakh Crore' and Address Youth on Job Creation.

Vodafone Idea’s promoters include Aditya Birla Group and Vodafone Group, which hold 18.1 per cent and 32.3 per cent stakes, respectively. The government, which owns nearly 33 per cent stake in the telecom company, is unlikely to participate in the fundraising, according to sources.

The company did not immediately comment on the development. Its stock closed at Rs 13.65 on Tuesday, down 3.64 per cent from Rs 14.27 on Monday. Last month, Vodafone Idea approved a fundraising of Rs 45,000 crore via equity and debt. Donald Trump Approached Elon Musk To Sell His Truth Social: Report.

The much-awaited capital raise by Vodafone Idea is crucial as it is essential to ensure immediate liquidity and facilitate the expansion of the network, Motilal Oswal Financial Services said in a recent report. The company still holds a debt of Rs 2.1 trillion with an annual instalment of Rs 430 billion from FY26 onwards. This looks challenging against FY24 EBITDA of Rs 84 billion.

(The above story first appeared on LatestLY on Mar 12, 2024 05:43 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).