New Delhi: After Vodafone Idea, Tata Teleservices (Maharashtra) on Tuesday said it would opt to convert the interest amount on the AGR dues into equity and after the conversion, the government’s stake in the company is expected to be around 9.5 per cent.
The announcement by Tata Teleservices (Maharashtra) came within hours of Voda Idea deciding to convert the interest amount on AGR dues into government equity.
In a filing to BSE, Tata Teleservices (Maharashtra) said that the Net Present Value or the NPV of interest is expected to be around Rs 850 crore as per the company’s estimate, subject to confirmation. Telecom Deptt (DOT).
“…According to the Empowered Committee of the Board of Directors, in its meeting held on 11th January, 2022, the Company is expressing its willingness to convert the entire amount of such interest relating to AGR dues into equity subject to mutual rules. and agreement on terms,” the filing said.
It added that there are conditions relating to the conversion of interest amount into equity shares and governance of the company following various regulatory/legal provisions.
The company will inform the DoT about the decision.
“After the conversion, it is expected that the government will hold approximately 9.5 per cent of the total outstanding shares of the company,” it said.
The average price of shares of the company as on the relevant date of August 14, 2021 as per the calculation method provided in the DoT communication is approximately Rs 41.50 per share, subject to final confirmation by DoT as per the filing.
According to the filing, in case of conversion, it will dilute the share of all existing shareholders of the company, including the promoters.
Earlier, DoT had given telcos a time period of 90 days to exercise the option to convert interest earned on installment payments into equity during the moratorium period.
As of September 2021, as per the data available on the BSE website, the promoters and the promoter group held around 74.36 per cent stake in the company, while the public holding stood at 25.64 per cent.
Shares of Tata Teleservices (Maharashtra) on Tuesday closed at Rs 291.05 on the BSE, which is 5 per cent higher than the previous close.
The company’s adjusted gross revenue (AGR) dues stood at Rs 16,798 crore, of which the company has already paid Rs 4,197 crore.
On October 29, 2021, the company had said that it would avail the option of deferring the AGR dues for a period of four years with immediate effect.
Vodafone Idea Limited (VIL) has also decided to opt for converting interest liability of about Rs 16,000 crore payable to the government into equity, which will hold around 35.8 per cent stake in the company.
If this plan is completed, the government will become the largest shareholder of the company, which is burdened with debt of about Rs 1.95 lakh crore.
Last week, telecom operator Bharti Airtel clarified that it will not avail the option of conversion of interest on deferred spectrum and AGR dues to equity proposed under the reform package.
The telecom sector got a shot in the arm last year with the government approving a blockbuster relief package, including a four-year break for companies from paying statutory dues, allowing sharing of scarce airwaves, revenue includes a change in the definition of tax on which tax is levied. 100% foreign investment through payment and automatic route.
The government had also given telecom companies an option to convert the interest amount related to the moratorium period into equity.
In a note on VIL on Tuesday, CLSA said that even after the relief, the company will “struggle” for annual spectrum payments beyond the moratorium of an additional four years, till the ARPU (average revenue per user) reaches Rs 250-300. does not reach
“At the end of the four-year moratorium, there will also be an option to convert the principal outstanding into equity at the discretion of the government,” it observed.
Credit Suisse said in a report that its calculations show that VIL’s cash flow position will remain “stretched” even after the four-year moratorium with the company requiring frequent equity injections in the absence of continuous operational improvement.
The announcement by Tata Teleservices (Maharashtra) came within hours of Voda Idea deciding to convert the interest amount on AGR dues into government equity.
In a filing to BSE, Tata Teleservices (Maharashtra) said that the Net Present Value or the NPV of interest is expected to be around Rs 850 crore as per the company’s estimate, subject to confirmation. Telecom Deptt (DOT).
“…According to the Empowered Committee of the Board of Directors, in its meeting held on 11th January, 2022, the Company is expressing its willingness to convert the entire amount of such interest relating to AGR dues into equity subject to mutual rules. and agreement on terms,” the filing said.
It added that there are conditions relating to the conversion of interest amount into equity shares and governance of the company following various regulatory/legal provisions.
The company will inform the DoT about the decision.
“After the conversion, it is expected that the government will hold approximately 9.5 per cent of the total outstanding shares of the company,” it said.
The average price of shares of the company as on the relevant date of August 14, 2021 as per the calculation method provided in the DoT communication is approximately Rs 41.50 per share, subject to final confirmation by DoT as per the filing.
According to the filing, in case of conversion, it will dilute the share of all existing shareholders of the company, including the promoters.
Earlier, DoT had given telcos a time period of 90 days to exercise the option to convert interest earned on installment payments into equity during the moratorium period.
As of September 2021, as per the data available on the BSE website, the promoters and the promoter group held around 74.36 per cent stake in the company, while the public holding stood at 25.64 per cent.
Shares of Tata Teleservices (Maharashtra) on Tuesday closed at Rs 291.05 on the BSE, which is 5 per cent higher than the previous close.
The company’s adjusted gross revenue (AGR) dues stood at Rs 16,798 crore, of which the company has already paid Rs 4,197 crore.
On October 29, 2021, the company had said that it would avail the option of deferring the AGR dues for a period of four years with immediate effect.
Vodafone Idea Limited (VIL) has also decided to opt for converting interest liability of about Rs 16,000 crore payable to the government into equity, which will hold around 35.8 per cent stake in the company.
If this plan is completed, the government will become the largest shareholder of the company, which is burdened with debt of about Rs 1.95 lakh crore.
Last week, telecom operator Bharti Airtel clarified that it will not avail the option of conversion of interest on deferred spectrum and AGR dues to equity proposed under the reform package.
The telecom sector got a shot in the arm last year with the government approving a blockbuster relief package, including a four-year break for companies from paying statutory dues, allowing sharing of scarce airwaves, revenue includes a change in the definition of tax on which tax is levied. 100% foreign investment through payment and automatic route.
The government had also given telecom companies an option to convert the interest amount related to the moratorium period into equity.
In a note on VIL on Tuesday, CLSA said that even after the relief, the company will “struggle” for annual spectrum payments beyond the moratorium of an additional four years, till the ARPU (average revenue per user) reaches Rs 250-300. does not reach
“At the end of the four-year moratorium, there will also be an option to convert the principal outstanding into equity at the discretion of the government,” it observed.
Credit Suisse said in a report that its calculations show that VIL’s cash flow position will remain “stretched” even after the four-year moratorium with the company requiring frequent equity injections in the absence of continuous operational improvement.
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