Business papers in India reported that the Mutual Fund industry and several other banks are waiting with bated breath for the Google and Vodafone-Idea deal to close. Google is reported to be looking to acquire 5% stake in the company.
The company has a borrowings of Rs1.18 lakh of which Rs3,000 crore is from Indusind Bank while Rs5,000 crore from Yes Bank. One of the Mutual Funds company Franklin Templeton, which had a substantial exposure to the telecom company, had shut down six of its funds.
Vodafone Idea had later in a statement said that currently there is no proposal as reported by the media under consideration by the board.
Meanwhile, several analysts were quoted as saying that even if the deal materialised it would still not be enough to address the woes of the debt-laden company. Credit Susie AG in a release said that unless Google was looking at a controlling stake, the chance of the company’s long-term survival is low.
Goldman Sachs was quoted as saying by a business news site that at the current market capitalisation, 5% stake will be valued at $100 million dollar which was less than 1% of the company’s outstanding debts.