New Delhi: A day later vodafone Idea Ltd opted to convert interest on dues into government equity, with its CEO saying on Wednesday that the government has made its position completely clear that it does not want to run the telco, and added that the existing promoters will continue to operate the company. Fully committed to the management and operation of , Vodafone Idea (VIL) on Tuesday announced an option to convert 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.
VIL Managing Director & CEO Ravinder Takkar The Telecom Department’s letter does not contain any stipulations on the equity conversion option, which allows board seats for the government, he told reporters in a virtual briefing. He said that the existing promoters are fully committed to managing and running the operations of the company.
“In all our conversations with the government leading up to the package and even after the announcement of the package, it has been clearly stated by the government that they do not want to run the company. They do not have the will to handle it. … they want three private players in the market, they don’t want a monopoly or a monopoly,” the VIL CEO said.
The government has “made it clear that they want the promoters of this company to take this forward”, he said, adding that VIL expects no change in its position.
Takkar further said that he expects the entire process to be completed in the coming months.
On the rationale for the decision, VIL’s top boss said that given that the majority of the debt of the telco is on the government, “it was clear to us that converting some of the debt into equity was a good option for the company to reduce its debt.” is onwards”.
Since the average price of the company’s shares with respect to the relevant date was below par, the equity shares would be issued to the government at a par value of Rs 10 per share, he explained.
After the conversion, Vodafone Group’s stake in the company will fall to around 28.5 per cent and that of the Aditya Birla Group to around 17.8 per cent.
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.
VIL Managing Director & CEO Ravinder Takkar The Telecom Department’s letter does not contain any stipulations on the equity conversion option, which allows board seats for the government, he told reporters in a virtual briefing. He said that the existing promoters are fully committed to managing and running the operations of the company.
“In all our conversations with the government leading up to the package and even after the announcement of the package, it has been clearly stated by the government that they do not want to run the company. They do not have the will to handle it. … they want three private players in the market, they don’t want a monopoly or a monopoly,” the VIL CEO said.
The government has “made it clear that they want the promoters of this company to take this forward”, he said, adding that VIL expects no change in its position.
Takkar further said that he expects the entire process to be completed in the coming months.
On the rationale for the decision, VIL’s top boss said that given that the majority of the debt of the telco is on the government, “it was clear to us that converting some of the debt into equity was a good option for the company to reduce its debt.” is onwards”.
Since the average price of the company’s shares with respect to the relevant date was below par, the equity shares would be issued to the government at a par value of Rs 10 per share, he explained.
After the conversion, Vodafone Group’s stake in the company will fall to around 28.5 per cent and that of the Aditya Birla Group to around 17.8 per cent.
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