Vodafone Idea said on Friday that it would raise up to Rs 25,000 crore in fresh capital as the telecom operator tries to pay off its hefty dues to the government.

The loss-making carrier has been ordered by the Supreme Court to pay roughly Rs 58,000 crore ($6.81 billion) in dues to the government over a 10-year period and it has so far paid Rs 7,900 crore. Vodafone said it would raise up to Rs 15,000 crore through debentures and an equal amount in shares and warrants, but together they will not exceed Rs 25,000 crore.

The plan to raise fresh capital also comes as the third largest telecom player in India grapples with an erosion in its subscriber base because of a price war triggered by Reliance Jio.

Vodafone lost 4.7 million subscribers in May alone, data from the telecom regulator showed, while its gross debt stood at Rs 1.19 lakh crore as of June end.

The joint venture between Britain’s Vodafone Plc and India’s Idea Cellular had last month reported its eight straight quarterly loss and unveiled a plan to reduce costs by Rs 4,000 crore a year over 18 months.
The funding plan will be considered at the annual general meeting of the shareholders on September 30, the company said.

Friday’s board meeting was keenly watched particularly after the Supreme Court judgment which gave operators 10 years to clear their AGR (adjusted gross revenue) dues with 10 per cent to be paid in this fiscal.

Moreover, there have been reports that Amazon along with Verizon may invest up to $4 billion in the company.

Analysts are optimistic that Vodafone Idea will stay in the game though they feel it will have to raise huge funds, sell non-core assets and opt for tariff hikes. Vodafone Idea is selling its entire 11.15 per cent in Indus Towers ahead of a merger with Bharti Infratel for Rs 4,000 crore. However, it will have to make a pre-payment in cash of Rs 2,400 crore as part of some payment obligations to the merged tower firm. Only Rs 1,600 crore will be added to its books from the sale.

“To meet its enhanced cash flow requirements in 2020-23 (when the moratorium on deferred spectrum ends), we estimate its average revenue per user would need to rise to Rs 170-200,’’ analysts at Citi had said in a recent note.

Ahead of the announcement, the Vodafone Idea stock witnessed volatility on the BSE. After gaining more than 7 per cent to hit an intra-day high of Rs 13.45, the stock gave up its gains to end at Rs 12.01— a fall of 4.38 per cent over the last close.