Govt to acquire Voda Idea stake after share price stabilises at Rs 10

PTI

New Delhi, September 8

The government will acquire a stake in debt-ridden Vodafone Idea after the stock price of the company stabilises at Rs 10 or above, according to an official source. Vodafone Idea Ltd (VIL) Board has offered a stake to the government at a par value of Rs 10 per share.

Rs 1,99,080 cr total gross debt

Rs 1,16,600 cr spectrum dues

Rs 67,270 cr AGR liabilities

Rs 15,200 cr debt from banks

“There is a SEBI norm that the acquisition should take place at par value. DoT will clear the acquisition after VIL shares stabilise at Rs 10 or above,” an official source said.

VIL shares are trading below Rs 10 since April 19. The stock declined by 0.82% to close at Rs 9.69 on the BSE on Thursday.

The Finance Ministry had cleared the proposal to acquire stake in VIL in July.

The company, however, contested the reason for delay in stake acquisition.

“There is no such guideline that prohibits the government from taking equity if company share value is less than par value. We understand that prior to the announcement of the landmark Telecom Reforms in September 2021, all due diligence was done by the government and relevant ministries in this matter,” VIL spokesperson said.

Debt-ridden Vodafone Idea (VIL) has decided to opt for converting around Rs 16,000 crore of interest liability payable to the government into equity which will amount to around 33% stake in the company while promoters’ holding will come down from 74.99% to 50%.

The government has given telecom operators an option of paying the interest for four years of deferment on the deferred spectrum instalments and AGR (adjusted gross revenue) dues by way of conversion into equity of the NPV of such interest amount.

At the end of the April-June 2022 quarter, VIL’s total gross debt (excluding lease liabilities and including interest accrued but not due) stood at Rs 1,99,080 crore, comprising deferred spectrum payment obligations of Rs 1,16,600 crore, AGR liabilities of Rs 67,270 crore that are due to the government, and debt from banks and financial institutions of Rs 15,200 crore.