Vodafone Thought (Vi) has initiated preliminary discussions with non-public credit score funds, together with Davidson Kempner, Oaktree and Varde Companions, to boost a small tranche of debt because it stares at a possible money crunch by the March 2026 quarter. The non-public credit score route is being explored as a stopgap measure whereas bigger financial institution funding stays unsure, based on Moneycontrol, which cited sources.
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Financial institution Loans Unsure
Inside estimates point out that the cash-strapped telecom operator may exhaust the funds wanted to maintain its capital expenditure programme by the fourth quarter of the present fiscal yr if financial institution loans don’t materialise. Regardless of repeated engagements, lenders have kept away from extending contemporary credit score, with the corporate’s broader capex plans pegged at Rs 50,000–55,000 crore. Vi is focusing on a November deadline to safe funding to keep away from disruption to its 4G and 5G community growth, which is vital to curbing buyer churn.
KPMG has submitted a revised Techno-Financial Viability (TEV) report in July to assist Vi‘s efforts to safe Rs 25,000 crore in financial institution debt. Nevertheless, based on sources cited within the report, bankers stay cautious, citing the absence of readability on adjusted gross income (AGR) dues and uncertainty over the compensation precedence mechanism, notably whether or not authorities dues will take priority over financial institution loans, given the Centre’s majority stake.
Lenders have sought express consolation from the federal government on this level earlier than continuing, sources added.
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AGR Moratorium Finish to Set off Heavy Outflows
The problem will intensify in September when the four-year moratorium on AGR and spectrum funds ends. Vi faces annual outflows of over Rs 18,000 crore in direction of these liabilities for the following six years, beginning March 2026. In FY26 alone, the corporate should pay Rs 16,428 crore in AGR dues and Rs 2,539 crore in deferred spectrum obligations. As of March 2025, its whole dues to the federal government stood at Rs 1.94 lakh crore, together with Rs 1.18 lakh crore in deferred spectrum funds and Rs 75,945 crore in AGR liabilities.
Fundraising Plans and Authorized Setbacks
The telco’s board in Could authorised plans to boost Rs 20,000 crore by an additional public providing, non-public placement or different means. This got here weeks after it informed the Supreme Court docket that it will be unable to function past the present fiscal with out financial institution financing — a plea the apex court docket dismissed. An earlier request to the federal government for waiver of curiosity, penalties and associated fees on AGR dues was additionally rejected.
Additionally Learn: Vodafone Thought Unlikely to Obtain Additional Reduction or Fee Extension
Business Prepares for Doable Market Exit
Analysts famous that Indus Towers’ latest determination to droop its dividend underscores the dearth of progress in Vodafone Thought’s engagement with the federal government. With out intervention on the AGR subject, many consider Vodafone Thought’s survival is in jeopardy, and components of the business are already making ready for a market with out the operator, the report mentioned.
