The government will acquire a stake in debt-laden Vodafone Idea after the company’s share price settles at Rs 10 or higher, according to an official source.
The Board of Vodafone Idea Corporation (VIL) offered a share to the government with a nominal value of Rs 10 per share.
An official source told PTI, “There is a SEBI standard that the acquisition should be made at face value. DoT will cancel the acquisition after the VIL shares settle at Rs 10 or higher.”
VIL shares are trading below Rs 10 since April 19. The stock fell 1.02 per cent to trade at Rs 9.68 on BSE on Thursday.
The Finance Ministry had approved the proposal to acquire a stake in VIL in July.
Debt-laden Vodafone Idea (VIL) has decided to opt to convert about Rs 16,000 crore of government interest obligations into equity which will amount to about 33 per cent stake in the company while promoters’ share will drop from 74.99 per cent to 50 per cent.
The government has given telecom operators an option to pay interest for four years of deferment on deferred spectrum installments and AGR (Adjusted Gross Revenue) receivables by converting them into equity at the net present value of the interest amount.
The total gross debt of the Company, excluding lease obligations, including accrued but not accrued interest, as of September 30, 2021, was Rs 1,94,780 crore.
The amount includes deferred payment obligations of Rs 1,08,610 crore, AGR liabilities of Rs 63,400 crore owed to the government and debts from banks and financial institutions of Rs 22,770 crore as of January 11, 2022 – when it offered to transfer the interest liability in Property rights.
At the end of the quarter from April to June 2022, VIL’s total gross debt (excluding lease commitments including accrued but not accrued interest) was Rs 1,99,080 crore, which includes deferred spectrum payment obligations of Rs 1,16,600 crore , AGR liabilities of Rs 67,270 crore owed to the Government and debts from banks and financial institutions of Rs 15,200 crore.
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