Government Can Convert Vodafone Idea Shares Into Shares Only After Telecoms Share Price Stabilizes Above Rs 10: Indus Tower
Last year, the government announced a relief package for loss-making telcos that allowed them to convert interest on deferred AGRs owed to the government into capital.
October 31, 2022: New Delhi: Mobile tower giant Indus Towers said the Center may convert Vodafone Idea (VI) accrued interest on deferred adjusted gross income (AGR) installments into equity only after the third player’s share price telecommunications company to stabilize above the nominal value of Rs 10, as per the provisions of the company law.
Previously, reports surfaced that the mobile tower company asked the debt-ridden telecom company to settle outstanding installments and pay on time every month for business continuity after November.
Indus Towers, in its quarterly report for the July-September period, said: “In September 2022, the Ministry of Finance approved a proposal to convert Vi’s Rs 16,130 crore of accrued interest on AGR-related deferred installments into capital, and now DoT (Department of Telecommunications) needs to finalize the transaction.”
‘India has the lowest tariffs in the world but…’: Vi CEO wants the government to take these measures to boost 5G coverage “(But) under the provisions of the company law, any capital injection cannot be less than par value (10) and therefore the capital conversion will only be decided once the share price stabilizes. above 10”.
Last year, the government announced an aid package for loss-making telcos that allowed them to convert deferred AGR interest owed to the government into capital, as it was a bailout for Vi, which was on the verge of bankruptcy.
More importantly, the equity conversion, which will give the Center a 33 per cent stake and make it the largest individual shareholder in the Aditya Birla Group and Vodafone Group joint venture to conclude its long-delayed Rs 20,000 fundraising crore through a combination of debt. and fairness, particularly as potential investors want clarity on this issue.
Vodafone Idea may lose access to the towers from November if it does not pay the fees to Indus Towers.
VI currently needs cash to settle huge vendor fees, including around Rs 7000 crore for Indus Towers alone. In addition, the fees put off the feuding company’s attempt to forge an alliance for 5G equipment supply deals.
Earlier this month, the Securities and Exchange Board of India (Sebi) approved the Center’s plan to convert VI’s more than $1.92 billion quotas into shares, Reuters news agency reported, citing two senior Government officials.
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