New Delhi: Vodafone Idea on Tuesday informed that the board at its meeting held on Monday has approved the conversion of the full amount of interest related to spectrum auction instalments and Adjusted Gross Revenue (AGR) Dues into equity. The conversion will therefore result in dilution to all the existing shareholders of the company, including the promoters.Shares of Vodafone Idea were trading over 16% lower to ₹12 apiece on the BSE in Tuesday’s opening deals.
“The Net Present Value (NPV) of this interest is expected to be about Rs 16,000 crore as per the Company’s best estimates, subject to confirmation by the DoT. Since the average price of the Company’s shares at the relevant date of 14.08.2021 was below par value, the equity shares will be issued to the Government at par value of Rs 10/- per share, subject to final confirmation by the DoT. The conversion will therefore result in dilution to all the existing shareholders of the Company, including the Promoters,” Vodafone Idea said.
“Following conversion, it is expected that the Government will hold around 35.8% of the total outstanding shares of the Company, and that the Promoter shareholders would hold around 28.5% (Vodafone Group) and around 17.8% (Aditya Birla Group), respectively,” it added.
As a part of relief package in October 2021, the Department of Telecommunications had laid out various options for clearing the statutory dues, following which, the Vodafone Idea opted for deferring payment of spectrum auction installments & AGR dues by 4 years.
However, the telecom companies were also required to pay interest on these dues during the moratorium period. The DoT, had further given a 90-day window to the telcos to decide if they want to opt for converting the interest amount pertaining to the moratorium period into equity.
While Bharti Airtel also opted for the four-year moratorium on AGR and spectrum dues last year, the country’s second largest telecom player earlier this month decided not to go for conversion of interest on deferred spectrum and AGR dues into equity.