SBI-Led Group Approves $3.5 Billion Loan For Vodafone Idea: Report
A consortium of lenders led by the State Bank of India has approved a $3.5 billion loan for Vodafone Idea to help the telecom operator improve its network and compete with rivals. The funding is contingent on Kumar Mangalam Birla remaining as chairman for the duration of the 10-year loan.
Why it matters
This financial lifeline is critical for the survival of India's third-largest wireless operator and the stability of the national telecom market.
A group of lenders led by State Bank of India agreed to provide about $3.5 billion of debt financing to Vodafone Idea Ltd. to help the mobile telephone operator rebuild its business, people familiar with the matter said.Other local lenders in the consortium include Union Bank of India Ltd. and the National Bank for Financing Infrastructure and Development, the people said, asking not to be identified because the information isn't public.Vodafone Idea, the country's third-biggest wireless operator in terms of users, plans to use some of the funds to improve its network and better compete with Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd., the people said.Conditions regarding the funding include billionaire Kumar Mangalam Birla remaining as chairman throughout the tenure of the loan, which is nearly 10 years, and guarantees of repayment in case of default, the people said.
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