New Delhi, A day after Vodafone Idea announced that it will allocate Rs 2,458 crore of preferential equity to vendors Ericsson and Nokia for partial payment of dues, renowned banker Uday Kotak on Friday said the equity will be allocated to the creditors to pay their dues. Took a dig at the system of issuance." loan".
Without naming Vodafone Idea, Kotak wrote in a post on X (formerly Twitter), "Financial markets create money out of thin air?"
He posted, "A model for companies in financial difficulty: issue equity to pay off their debt to creditors. If the stock trades well, the creditor can sell in the market and get paid from investors "
As a parting shot, Kotak continued, "What's that story about Peter and Paul?" In apparent reference to the old adage of robbing Peter to pay Paul.Kotak's views generated considerable discussion on social media, as the import of the post was clear to netizens.
The post comes just a day after debt-laden telecom operator Vodafone Idea said it will allot shares worth Rs 2,458 crore to vendors Nokia India and Ericsson India to partially clear their dues.
The board of Vodafone Idea Ltd (VIL) has approved the allotment of shares on a preferential basis at about 35 per cent higher than the company's follow-on offer price, and it comes with a lock-in of six months.
"The Board of Directors of Vodafone Idea Limited today approved preferential allotment of approximately 166 crore equity shares of face value Rs 10 each at an issue price of Rs 14.80 per share aggregating to Rs 2,458 crore. Its key sellers, Nokia Solutions and Networks India Pvt Ltd and Ericsson India Pvt Ltd,” the telco’s filing said.Nokia and Ericsson will participate up to Rs 1,520 crore and Rs 938 crore, respectively, subject to approval by VIL shareholders at the EGM to be held on July 10, 2024.
“Both Nokia and Ericsson have a long-term partnership with VIL as key suppliers of network equipment, and this preferential allotment will enable VIL to clear part of their dues,” the filing said."
Without naming Vodafone Idea, Kotak wrote in a post on X (formerly Twitter), "Financial markets create money out of thin air?"
He posted, "A model for companies in financial difficulty: issue equity to pay off their debt to creditors. If the stock trades well, the creditor can sell in the market and get paid from investors "
As a parting shot, Kotak continued, "What's that story about Peter and Paul?" In apparent reference to the old adage of robbing Peter to pay Paul.Kotak's views generated considerable discussion on social media, as the import of the post was clear to netizens.
The post comes just a day after debt-laden telecom operator Vodafone Idea said it will allot shares worth Rs 2,458 crore to vendors Nokia India and Ericsson India to partially clear their dues.
The board of Vodafone Idea Ltd (VIL) has approved the allotment of shares on a preferential basis at about 35 per cent higher than the company's follow-on offer price, and it comes with a lock-in of six months.
"The Board of Directors of Vodafone Idea Limited today approved preferential allotment of approximately 166 crore equity shares of face value Rs 10 each at an issue price of Rs 14.80 per share aggregating to Rs 2,458 crore. Its key sellers, Nokia Solutions and Networks India Pvt Ltd and Ericsson India Pvt Ltd,” the telco’s filing said.Nokia and Ericsson will participate up to Rs 1,520 crore and Rs 938 crore, respectively, subject to approval by VIL shareholders at the EGM to be held on July 10, 2024.
“Both Nokia and Ericsson have a long-term partnership with VIL as key suppliers of network equipment, and this preferential allotment will enable VIL to clear part of their dues,” the filing said."
