Vodafone Group pledges Voda Idea stake with 7 banks

Mumbai: Vodafone Group Plc has pledged its entire 44.39 per cent stake in Vodafone Idea (VIL) — worth over .Rs 18,000 crore — with seven foreign banks, after India’s largest telco issued new shares to the promoters following a Rs 25,000-crore rights issue.

Vodafone Promoter Mauritius Shareholders and Vodafone Promoter Indian Shareholders have pledged their 44.39 per cent stake in Vodafone Idea, the company told stock exchanges on Wednesday. There are 12 entities under Vodafone Group that own the stake, and are based out of India and Mauritius.

According to the filing, Vodafone Group has pledged the shares for “financing arrangements” in favour of HSBC Corporate Trustee Company (UK) Ltd, which is acting as a trustee for BNP Paribas, HSBC Bank Plc, ING Bank NV-Singapore branch, StanChart Bank, Bank of America Merrill Lynch and Morgan Stanley Senior Funding Inc.

Shares of Vodafone Idea plunged 7.12 per cent on the BSE on Wednesday to close at Rs 14.35 apiece. At that price, Vodafone Group’s shares were worth nearly Rs 18,304 crore.

Vodafone’s call to pledge its shares comes a few days after the UK-headquartered telco and Aditya Birla Group infused Rs 17,920 crore into Vodafone Idea via the rights issue. After the fund infusion, the promoters’ stake has risen to 71.57 per cent, from 71.33 per cent.

India’s largest telco is a result of the merger between Vodafone India and Idea Cellular. The union was completed last August. The company, with a net debt of Rs 1.14 lakh crore, needs to reduce debt and free up cash to invest in expanding its 4G network to take on rivals Reliance Jio Infocomm and Bharti Airtel.

Bharti Airtel too is in the process of raising Rs 25,000 crore via a rights issue.