US wireless carrier Verizon and Amazon are looking to invest over $4 billion (roughly Rs. 29,354 crores) for a stake in India’s Vodafone Idea, as per the reports.
Verizon and Amazon Investment
As an effect, the shares of Vodafone Idea climbed 25 percent in Thursday’s trade as media reports suggested that Verizon Communications and e-commerce giant Amazon are planning to invest over $4 billion for a stake in the telecom operator.
The sources said that the stake-sale talks were paused due to the outcome of a Supreme Court case on staggered payments of government dues.
As it was uncertain and could have threatened the survival of Vodafone Idea.
But, the Supreme court’s decision on Tuesday to give telcos 10 years to pay a total of Rs 1.4 trillion in dues had helped in the resumption of the negotiations again.
How Will This Help The Vodafone Idea?
So far, the fundraising is very critical for the cash-strapped Vodafone Idea as they have to pay government dues and also will have to invest in upgrading its network, which was halted for lack of funds.
Previously, the telecom operator said that its ability to continue as a going concern rested on a positive outcome of the hearing.
Vodafone Idea is basically a joint venture between Britain’s Vodafone Group Plc and India’s Idea Cellular.
Further, Vodafone Idea informed that its board will meet on 4 September to consider proposals for fundraising during a late-night filing on Tuesday.
Currently, Amazon has a major presence in India with its e-commerce business.
While Verizon has shown its presence in India through its media and online unit Oath Inc.
Prior to this, Google was also in talks with Vodafone Idea to acquire a 5% stake earlier this year.
What Does Vodafone Idea Say?
So far, Vodafone Idea and Amazon did not respond to the Reuters request for comment.
Vodafone Idea has already paid Rs. 7,854 crores to the Indian government in telecoms dues and still owes more than Rs. 50,000 crores to the government, as per the regulatory filings.
Apart from this, the telecom also reported a staggering loss of Rs 25,460 crore in the June quarter due to one-time charges, including provisions to cover payments due to the government.
Shares in Vodafone Idea, which ended 13 percent lower after Tuesday’s court ruling, were up by 27% at Rs. 12.55 on the NSE index by 04:05 GMT today.
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