What clearing vendor dues via equity means for firms

ET Intelligence Group: In a rare move by a listed company, Vodafone Idea’s board in its meeting on Thursday approved the preferential allotment of equity shares at an issue price of Rs 14.80 amounting to Rs 2,458 crore to two of its key vendors – European equipment suppliers Nokia and Ericsson – in a bid to repay their dues. Nokia will be issued 102.7 crore equity shares worth Rs 1,520 crore and representing 1.48% of the post-issue capital of Vi. Ericsson will be issued 63.3 crore equity shares worth Rs 938 crore, representing 0.91% of post-issue shareholding of the company. The share price of Vi closed 2.25% lower at Rs 16.07 on Thursday.