NEW DELHI: Debt-ridden Vodafone Idea (VIL) has decided to opt for converting about Rs 16,000 crore interest dues liability payable to the government into equity which will amount to around 35.8 percent stake in the company, as per a regulatory filing of the telecom firm. VIL is reeling under a debt burden of about Rs 1.95 lakh crore.
The board of directors, at its meeting held on 10th January 2022, has approved the conversion of the full amount of such interest related to spectrum auction installments and AGR dues into equity. UK-based Vodafone Group Public Limited has a 28.5 percent stake, while Kumar Mangalam Birla-led Aditya Birla Group has a 17.8 percent stake. Now it looks likely that the Government of India will play a key role in the decisions with a stake of up to 36 percent. Meanwhile, Vodafone Idea shares fell 19 percent in the stock index on Tuesday after this crucial development. 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,Vodafone Idea said in a regulatory filing.
The conversion will result in dilution to all the existing shareholders of the company, including the promoters. Following conversion, it is expected that the government will hold around 35.8 percent of the total outstanding shares of the company and that the promoter shareholders would hold around 28.5 percent (Vodafone Group) and around 17.8 percent (Aditya Birla Group), respectively," the filing said.