Idea Cellular in $1.1bn fund-raising plan
Idea Cellular to raise $1.1bn as merger with Vodafone India nears to create biggest Indian mobile operator
Indian operator Idea Cellular plans to raise the equivalent of $1.1 billion in equity in preparation for its merger with Vodafone India.
About half of the money will come from Aditya Birla Group (ABG), the Indian multinational that already owns 42.4% of Idea Cellular.
But Idea’s board has not yet identified the source of the rest of the funds, which are needed to strengthen the balance sheet of the merged Vodafone India/Idea company. That deal is expected to be complete in the first half of 2018, said the companies.
The merger will give the combined Vodafone/Idea a 33.9% share of the Indian market, based on October 2017 figures from the Indian regulator. This will put it ahead of the combination of Bharti Airtel, Telenor India and Tata Teleservices, which have a 31.4% share based on the same report.
The fund-raising means that ABG will own 47% of Idea and 26% of the merged company. ABG will buy a minimum of 2.5% of the merged entity from Vodafone, which said its ownership in the combined entity is expected to be approximately 47.5% at completion.