\"The company is considering tapping the overseas bond markets in early February, as it needs immediate funds for investing in its networks, making payments to vendors and arresting subscriber losses,\" one of the people told ET.
'Govt holding seen as matter of comfort for bond investors'<\/strong>
An emailed query sent to the company did not elicit a response till the time of going to press on Thursday.
The move comes after the company on Tuesday decided to convert its interest on deferred spectrum and adjusted gross revenue (AGR) payments into government equity, giving the government a possible 35.8% stake in the company. The government holding is seen as a matter of comfort for bond investors, experts say.
Holding gross debt of Rs 1.9 lakh crore on its books, including deferred spectrum and AGR payment obligations to the government and debt from banks and financial institutions, the company's cash and cash equivalents had slumped to Rs 250 crore at September end from Rs 920 crore at June end.
\"With the government debt being converted to equity, there will be a substantial improvement in Vi's credit ratios,\" said Hemant Mishr, founder and CIO of SCUBECapital, a Singapore-based global fund, making the case for the otherwise highly-leveraged company to tap bond markets.
Mishr added that in spirit, Vi continues to be a private sector company, being managed professionally. \"On the back of an improved balance sheet, there will be potential appetite from international investors in the loan, bond and FCCB<\/a> (foreign currency convertible bond) markets, provided the valuation remains reasonable\".