Indian operator Vi (Vodafone Idea) plans to raise up to USD 1 billion (approximately INR 74 billion) from the sale of its fixed line broadband subsidiary, optical fibre unit and data centres business. Via this sale, Vi seeks to raise funds to meet upcoming liabilities, The Economic Times reports. Vi faces payments of INR 225 billion due between December 2021 and April 2022, in a mix of regular debt and regulatory fees. Its cash balance stood at INR 3.5 billion at 31 March, and the operator generated a loss of INR 69.8 billion for the March quarter.
For the past nine months, Vi has been trying to close an INR 250 billion fundraise through a mix of debt and equity, according to the paper's sources. However, it has failed to complete this plan, despite several rounds of discussions with numerous investors.
Vi CFO Akshaya Moondra earlier said the operator expects to generate an additional INR 30 billion in cash this fiscal year from tax refunds and sale of land parcels that were bought for data centres.
"Vodafone Idea is expecting between USD 800 million and USD 1 billion (from the broadband, optic fibre and data centre sales) but investors are not very keen at these price points," said an unnamed investment banker aware of the development.
A second person said that the proposed fibre asset sale could happen on a sale and leaseback model, in which Vi sells the fibre assets and takes the capacity on long-term lease from the buyer. "The valuation would hinge on the tenure of the lease arrangement that Vi enters with the potential buyer, and how much it pays as monthly rentals towards lease charges," the same source added.
Vi has around 267.8 million customers across India. The operator has a data centre in Navi Mumbai and around 160,000 km of fibre infrastructure. Its fixed-line broadband business is housed under the You Broadband subsidiary, which Vi acquired from TRG Capital in 2017 for INR 4 billion. The You Broadband service is available in 21 cities, with over 3,000 km of optical fibre and 6,000 km of last-mile cables.
Vodafone Idea had tried to sell the fibre assets and data centre business back in 2019, but talks were terminated because of valuation differences.
