India's Idea to raise €882m ahead of Vodafone merger

Indian mobile phone operator Idea Cellular on Thursday said it planned to raise up to INR 67.5bn (€882m) to strengthen its balance sheet ahead of its merger with Vodafone.

In a statement, Idea said it would sell INR 32.5bn in shares (€425m) to its main shareholder Aditya Birla Group (ABG) and the rest though a sale to investors or a rights issue.

ABG's stake will rise to 47% from 42% after the deal, Idea said.

“ABG and Vodafone have agreed that ABG will buy a minimum of 2.5% of the merged entity from Vodafone, or such higher stake required in order for ABG to ultimately own at least 26% of the merged entity,” it added.

Vodafone will get a minimum of INR 19.6bn (€256m) from the sale and Vodafone's ownership in the combined entity is expected to be 47.5% at completion. Any shares over 45.1 percent will not be subject to lock-up and Vodafone will be free to sell the relevant shares without restrictions.

Vodafone and Idea expect to complete the merger in the first half of calendar 2018.