New Delhi: Idea Cellulars shareholders have approved changing the name of the No 3 carrier to Vodafone Idea Ltd.
The shareholders also approved raising Rs 15,000 crore via non-convertible securities which may be used for paring debt of the entity emanating from merger of Idea with Vodafone India.
Change in the name of the company and issue of non-convertible securities in private placement basis passed with requisite majority, the company said in a statement to the Bombay Stock Exchange Tuesday after the extraordinary general meeting held in Ahemdabad concluded.
Ideas shares rose 3.02% to Rs 57.90 a piece on the BSE, outperforming the flat benchmark index.
The merger of the countrys No 2 and No 3 carriers will create the largest telecom firm in the country, with an almost 42% customer market share and 37% revenue market share.The new entity however will have a debt overhang of Rs 1,14,000 crore which it has been steadily trying to pare by raising money in the past few months.
The new funding of Rs 15,000 crore would also go towards that cause, as the merged entity looks to strengthen its balance sheet to better take on rivals Reliance Jio and Bharti Airtel.Idea has already raised Rs 6,750 crore from promoters this year and through a private placement of shares, while Vodafone is infusing Rs 7,390 crore.
Besides, the two have sold their captive towers to American Tower Corp.
for Rs 7,850 crore, which will translate to more funds for the operators.
The merged companys list of senior executives was announced two months ago, with Balesh Sharma as chief executive officer of the new entity.
Analysts estimate that Sharma and his team will have to hit the ground running as both telcos have trailed Jio and current market leader Bharti Airtel in terms of rolling out 4G and Voice over LTE services, face an uphill battle to retain and add subscribers while regaining financial health.
While the key managerial roles have been announced, those in the next rung are getting decided upon.