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Confident that promoters will support upcoming fund raise plan

The telecom reform package announced by the government is a bold step and addresses a lot of issues for the industry, Vodafone Idea (Vi) MD and CEO Ravinder Takkar said in an exclusive interview to CNBC-TV18. Earlier this month, the government approved a host of policy measures aimed at giving some relief to the telecom sector.

The government’s package for the sector includes a four-year moratorium on adjusted gross revenue- and spectrum-related dues owed by telecom operators to the Department of Telecommunications (DoT). While the dues will have to be paid after four years with an interest of above the MBLR, the government will have an option of converting the existing debt to equity.

Calling the government’s reform package “a very bold step in many ways”, he said it addresses “not only some of the structural and operational issues in the industry but also some of the financial stress and challenges that the industry has been facing. So in many ways it is a very important step.”

“It, of course, has big implications on Vodafone Idea. One is that there seems to be some concerns around us continuing on as a business even though we were always confident that we will be around serving our customers, so hopefully now we can put that behind us in the first place,” he said.

He said the company’s promoters have been very supportive, and have invested a substantial amount of money in the business.

“If you look at the history of the company and what the promoters have done, the promoters have invested Rs 1.9 lakh crore into the business so far. A substantial amount of Rs 4 lakh crore has been spent on building the assets. As recently as 2019, Rs 25,000 crore of funding effort was led by the promoters in the rights issue that was done. So the promoters have been very supportive,” said the Vodafone Idea CEO.

“As the CEO of the company, I can tell you that the amount of support that I get from them on every front is very significant and important,” he said.

“As the details of the government package come out and we get the exact, specific payments and the moratorium amounts that will take place, we will then update our business plan accordingly, because this package makes a significant change to our business plans,” he added.

Exuding confidence that the company’s promoters will support its upcoming fund-raise plan, he said: “The promoters have been very supportive of all fund-raising… They have expressed to me clearly that they will be supporting this fund-raising process, and will also have the opportunity to participate depending on the path that we take going forward.”

“I am sure that with this package announcement, we will continue to get positive support from the promoters as we always have in the past,” he said. CNBC TV18

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