New Delhi : The Board of stressed telecom company Vodafone Idea has approved conversion of interest on spectrum auction installments 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.
“Following conversion, it is expected that the government will hold around 35.8 per cent of the total outstanding shares of the company, and that the promoter shareholders would hold around 28.5 per cent (Vodafone Group) and around 17.8 per cent (Aditya Birla Group), respectively,” Vodafone Idea said in a regulatory filing on Tuesday morning.
The company said that Net Present Value (NPV) of the interest is expected to be about Rs 16,000 crore as per its best estimates and subject to confirmation by the Department of Telecom (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,” Vodafone Idea said.
As part of ‘Telecom Reforms Package,’ the government had last October eased the terms for payment of statutory dues.
In line with the terms of the relief package, Vodafone Idea had earlier opted for deferment of spectrum auction instalments due upto four years and deferment of AGR related dues by four years.
The DoT had also provided a time period of 90 days to the company to exercise the option of converting the interest that would accrue on instalment payment during the moratorium period into equity.
Vodafone Idea shares traded in red on BSE on Tuesday at around 10 am. The shares were trading at Rs 13.25 a piece, down almost 11 per cent over the previous close.