Neeraj Mittal, the secretary of the Department of Telecommunications (DoT), has allegedly received an urgent request from Vodafone Idea (Vi) CEO Akshaya Moondra to authorize stock conversion for the company’s outstanding Adjusted Gross Revenue (AGR) and spectrum auction dues from 2012, 2014, 2015, and 2016. This appeal comes as Vi struggles with its present financial status and must pay a hefty increase in regulatory obligations, according to media reports.
The report claims that Vodafone-Idea’s failure to give a bank guarantee of Rs 6,091 crore or make a cash payment of Rs 5,493 crore due to a loss from the 2015 spectrum auction is detailed in Moondra’s letter to the DoT dated March 11. He has requested that the DoT abstain from pursuing any disciplinary actions against the business.
Government stake in Vodafone-Idea to go up to 49%
According to the 2021 Telecom Reform Package, Vodafone-Idea is requesting an equity conversion in order to solve its cash flow issues. Moondra’s plan, which is based on a net present value (NPV) protected basis, aims to turn Rs 36,950 crore in debt into equity. With the proposed conversion of Rs 13,809 crore linked to the 2015 spectrum payment, the government’s share in Vodafone-Idea may rise from its current 22.6% to 49%.
Moondra reportedly specifically requested “support for equity conversions up to the threshold of government of India shareholdings at 49%, that is, an amount of Rs 36,950 crore on NPV protected basis, subject to customary approvals at our end.”
However, a 49% ownership would be worth about Rs 26,656.5 crore at Vodafone-Idea’s present market capitalization of about Rs 54,401 crore. Requests for comment from the telecom have not yet received a response. Given the recent delaying of a plan to relieve AGR dues, which has had a substantial impact on the financially strapped telecom operator, the DoT’s judgment on Vodafone-Idea’s appeal is vital.
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