SBI-led lenders not keen to grant additional loans to Vodafone Idea: Sources

Vi's loss in Q2FY23 had widened to Rs 7,596 crore (Image: Reuters)

Shortly after it was reported that Vodafone Idea (Vi) has sought additional loans up to Rs 7,000 crore, banking industry sources told CNBC TV-18 on January 6 that the lenders are not keen to fund the beleaguered telecom operator.

According to persons who are aware of the development, the State Bank of India (SBI)-led lenders have sought clarity on whether the interest of Rs 16,130 crore on deferred adjusted gross revenue, which Vi is liable to pay, will be converted into government equity.

The lenders have also argued that Vi would use the fresh loan to repay the existing debt, which would not leave the company with any additional financial resources that could be injected into its business operations, the sources added.

Vi, notably, requires more than Rs 6,800 crore to repay Indus Towers. The latter had warned the telecom operator of disconnecting access to its tower sites if the dues were not cleared. Vi had, subsequently, proposed to clear the dues in the form of staggered monthly repayments.

The banks believe that the company needs around Rs 24,000 crore to address its immediate financial crunch, the CNBC TV-18 report said, citing the persons with knowledge of the matter.

News agency Reuters learnt from sources that the lenders' response to Vi's request for additional loan will depend on either of the two factors - debt-to-equity conversion by the government or a capital increase by the key stakeholders - the UK-based Vodafone Group and India's Aditya Birla Group.

In the quarter ending September 2022, Vi's loss widened to Rs 7,596 crore, as compared to the loss of Rs 7,297 crore registered in the June quarter. The company's revenue grew 2 percent to Rs 10,611 crore from Rs 10,407 crore logged in the preceding quarter.