About half of the money will come from Aditya Birla Group (ABG), the Indian multinational that already owns 42.4% of Idea Cellular.
But Idea’s board has not yet identified the source of the rest of the funds, which are needed to strengthen the balance sheet of the merged Vodafone India/Idea company. That deal is expected to be complete in the first half of 2018, said the companies.
The two are already planning to raise $1.2 billion by selling off Vodafone India’s and Idea’s standalone tower businesses to American Tower.
The merger will give the combined Vodafone/Idea a 33.9% share of the Indian market, based on October 2017 figures from the Indian regulator. This will put it ahead of the combination of Bharti Airtel, Telenor India and Tata Teleservices, which have a 31.4% share based on the same report.
The fund-raising means that ABG will own 47% of Idea and 26% of the merged company. ABG will buy a minimum of 2.5% of the merged entity from Vodafone, which said its ownership in the combined entity is expected to be approximately 47.5% at completion.