Telecom major Vodafone Idea on Tuesday said that the government is expected to hold 35.8 per cent of its shares and become the largest shareholder after the company’s Board on Monday approved the conversion of interest liabilities into equity.
The full amount of such interest with a net present value (NPV) of approximately Rs 16,000 crore related to spectrum auction instalments and adjusted gross revenue (AGR) dues will be converted into equity, as per a regulatory filing.
In October 2021, the Department of Telecommunications (DoT) had given three options to the company as part of the Telecom Reforms Package. The company was granted an option to defer the payment of spectrum auction instalments due up to four years with immediate effect, excluding the instalments due in respect of Spectrum Auction 2021.
Additionally, it was given a one-time opportunity to opt for deferment of AGR related dues as determined by the Supreme Court in the AGR case, by a period of four years with immediate effect.
Lastly, it was allowed a one-time opportunity to exercise the option of paying interest for the four years of deferment on the deferred spectrum instalments and AGR dues by way of conversion into equity of the NPV of such interest amount.
Besides the 35 per cent stake to the government, promoter shareholders (Vodafone Group) would hold around 28.5 per cent while 17.8 per cent will be held by the Aditya Birla Group.
The shares of the company tanked 18.86 per cent from the previous close of Rs 14.85 to hit an intra-day low of Rs 12.05 after the announcement.
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