Following the issue of the shares, Nokia and Ericsson will have a 1.5% and 0.9% stake in the Vodafone Idea, respectively

Indian carrier Vodafone Idea said it will issue shares worth INR24.58 billion ($294.3 million) to pay existing debts with Nordic vendors Nokia and Ericsson, local press reported.

India’s smallest telco by subscribers announced plans to issue preferential shares worth INR 15.20 billion to Nokia Solutions and INR9.38 billion to Ericsson India.

These will be issued at INR14.8 per share, according to the reports.

Following the issue of the shares, Nokia and Ericsson will have a 1.5% and 0.9% stake in the Vodafone Idea, respectively.

Vodafone Idea also has debts with tower operator Indus Towers, where rival operator Bharti Airtel is a majority shareholder. The chairman of Bharti Airtel recently urged Vodafone Idea to start paying debts with the company and stated that Indus Tower will no longer provide new services to Vodafone Idea if it failed to pay.

As of the end of March, Vodafone Idea’s deferred payment obligations to the Indian government, its largest individual shareholder, was at INR 2.03 trillion, while its total debt from banks and financial institutions stood at INR40.4 billion, according to the report.

Vodafone Idea recently concluded its $2.16 billion follow-on public offer (FPO) and also raised about $648.5 million from 74 anchor investors. Vodafone Idea recently said it expects to use the equity and debt funding to deploy its 5G service across India within six to seven months of securing the funds; it was also seeking funds to bolster its 4G network and pay tower vendors.

Swedish vendor Ericsson recently confirmed that it was in discussions with Vodafone Idea with the aim of securing new orders for 4G and 5G equipment.

Recent reports stated that Vodafone Idea was also having talks with Finnish vendor Nokia for the supply of telecom equipment. The telco additionally aims to expand its current 4G network to be in a better position to compete with rival telcos Bharti Airtel and Reliance Jio Infocomm, which have an extensive 4G and 5G coverage across India.

Nokia currently supplies the gear for Vodafone Idea’s 4G service in nine telecom circles across India, while Ericsson provides the 4G equipment in eight circles. Chinese vendors Huawei and ZTE also supply 4G equipment for Vodafone Idea.

Vodafone Idea recently confirmed plans to invest a total of INR500-550 billion within the next three years, the carrier’s CEO Akshaya Moondra said during a conference call with investors. 

The executive said that the telco aims to expand 4G coverage in 17 priority circles, launch 5G in key geographies and increase capacity to meet increasing data demand, as well as expand its enterprise business.