Vodafone Idea: GoldenTree, PIMCO Join Oak Hill-led Consortium For US$2 Bn Funding Talks


US-based GoldenTree Asset Management and Pacific Investment Management Co (PIMCO) have likely joined a consortium led by investment firm Oak Hill Advisors, which is in discussions to provide a US$2 billion (Rs 14,720 crore) credit line to Vodafone Idea, three people aware of the matter said.

The move to expand the global lender consortium is aimed at quickly filling up Vi’s sizeable funding requirement and also distributing the risk exposure across a larger pool of financiers, one of the people told ET.

The proposed funding model is likely to be a blend of convertible instruments, comprising bonds and warrants with a linked equity option that will allow the consortium members to turn a portion of the debt into shares of the company, bankers and industry executives with knowledge of the matter said.

India’s telecom sector, in the efforts of enabling policies including more quantum of the spectrum, is set to establish new benchmarks in the next-generation network deployments and service delivery.

The lossmaking telecom joint venture, co-owned by UK’s Vodafone Group and India’s AV Birla Group, needs funds urgently to ramp up its 4G operations, arrest a steady loss of subscribers to rivals Reliance Jio and Bharti Airtel, and clear its substantial backlog of statutory dues to the government.

The telco had in September announced a Rs25,000 crore fundraising plan via a mix of debt and equity. The US$2 billion credit line it is negotiating with the consortium is part of that plan.

The Vodafone Group declined to comment, while GoldenTree, PIMCO, Oak Hill, Vi and the AV Birla Group did not reply to ET’s queries till press time Sunday.

The expanded consortium, it is learnt, is at an advanced stage of wrapping up due-diligence and assessing the tax implications for the overseas lenders, and is on track to formalising the final funding terms that could lead to a binding term-sheet by mid-January. A binding contract, typically, gets drawn up once all parties involved reach an agreement on details laid out in the term sheet.

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