Vodafone Plc offering Vodafone Idea stake to banks, BSNL for free: Report

Vodafone Plc is ready to offer its 45 per cent stake in beleaguered telco Vodafone Idea (Vi) for free to banks and financial institutions or Bharat Sanchar Nigam Ltd (BSNL) if they take over the company, sources told Business Standard.

This development highlights the plight of the debt-laden telecom major which sunk over 15 per cent in early trade on Thursday, a day after Kumar Birla stepped down as non-executive chairman, costing the company over Rs 2,700 crore in market cap.

"We are looking at various options since both promoters — Aditya Birla Group (ABG) and Vodafone Plc — are ready to offer their stake for free to lenders or to BSNL. If BSNL takes over the company, the payment of dues to the Centre by a government entity will be just a book entry," a source told BS.

Read | Nationalising Vodafone Idea may be its only means of survival in India

Vi, which is scrambling to stay afloat, has liabilities worth Rs 25,000 crore to the banks and financial institutions alone. It also has government dues like adjusted gross revenue payments, which are close to Rs 58,250 crore. Total liabilities of the company are to the tune of Rs 1.8 lakh crore.

The source added that with the promoters offering their stakes for free, it is possible for BSNL to take up the offer, given the strong userbase the company has across the world, including India.

Vodafone and Idea Cellular in 2017 merged to form Vodafone Idea in a deal valued $23 billion. Ever since the merger was completed in 2018, the company has seen a series of losses as the intense competition from rivals Reliance Jio and Bharati Airtel choke the telco.