The board of Vodafone Idea Ltd has approved conversion of AGR dues and spectrum interest into equity, leading to the government becoming a nearly 36% stakeholder in the telecom company.
It is now informed that the Board of Directors, at its meeting held on 10th January, 2022, has approved the conversion of the full amount of such interest related to spectrum auction instalments and AGR Dues into equity,' the company announced in a filing to BSE. Following conversion, it is expected that the Government will hold around 35.8% of the total outstanding shares of the Company, while the promoter shareholders Vodafone Group and Aditya Birla Group would hold around 28.5% and around 17.8% stake in the company respectively.
Vodafone Idea shares fell nearly 19% today to Rs 12.05 apiece on NSE, before partially recovering losses. The net present value of interest is expected to be about Rs 16,000 crore, following final confirmation by the Department of Telecommunications, the company said. The equity shares will be issued to the government at par value of Rs 10 per share.
This reform by the government to provide an option to monetise interest portion of the AGR and spectrum dues for 4 years was targeted for Vodafone Idea given the company is facing such a cash crunch situation, Nitin Soni, Senior Director, Corporates at Fitch Ratings, told CNBC TV18. This will provide some cash flow relief to the company, and help them to expand their 4G spectrum.
Credits: Financial Express
