On Tuesday, Vodafone-Idea informed the exchanges about the decision of resolving debts and interests converting into government equity. The company decided to adjust the gross revenue dues by converting them into equity.
This is a smart business move by Vodafone. Vi was under debt, which exceeded Rs 2 lakh crore, and tried methods to raise funds for the last few years. On 14th October 2021, the Department of Telecommunications (DoT) provided different ideas to the company in order to resolve the four-year-old debts.
Vi’s board of directors held a meeting on 10th January 2022 and approved the idea of converting the whole amount of interest related to AGR dues and spectrum installments into equity.
It is said that once the conversion of interests into equity takes place, the government would end up owning around 35.8 percent of the total shares. Shares for promoters would remain around 28.5 percent and the Aditya Birla group would get a 17.8 percent stake in the Vodafone group.
The company told about the decision openly by saying, “The conversion will therefore result in dilution to all the existing shareholders of the company, including the promoters. It is expected that the government will hold around 35.8 percent of the total outstanding shares of the company and that the promoter shareholders would hold around 28.5 percent (Vodafone Group) and around 17.8 percent (Aditya Birla Group), respectively.”
The gross debts on Vi come to around 1.95 lakh crore including 1.09 lakh crore on the deferred spectrum, Rs 63,400 crore on AGR liability that is due to the government. SBI possesses the highest exposure to Vi among all the lenders.