Govt. expects Vi promoters to infuse capital, Read and Birla had said a firm no

The government is expected to come out with a relief package as it plans to offer some breathing space to the ailing telecom sector, especially cash-strapped Vodafone Idea, which is on the brink of a financial collapse.

While no specific date has been announced by the government for announcing the telecom relief package, several officials have confirmed that work is underway to provide relief to all stressed telecom companies, especially Vodafone Idea Limited (VIL).

Even as the government readies the relief package for the telecom sector, it wants promoters of Vodafone Idea — the Vodafone Group Plc and Aditya Birla Group (ABG) — to show their commitment to telecom operations by infusing capital, as reported.

All efforts are being made to retail a three-player telecom market. However, it is important for the two promoters to infuse capital into the company and chalk out a strategy for the next few years.

-Promoters not keen on capital infusion-
Vodafone Group CEO Nick Read had earlier made it clear that the company will not infuse any additional capital into the loss-making Indian telecom joint venture with ABG.

Meanwhile, ABG Chairman Kumar Mangalam Birla recently stepped down as VIL’s non-executive chairman after writing a distress letter to the government. In his letter, Birla offered to hand over his stake (27.6 per cent) in Vodafone Idea to any government entity that can save the company.

It seems both promoters have made their mind up and will not be infusion any additional capital into the joint venture telecom businesses.

In such a scenario, the government feels that a relief package may not be enough to save Vodafone Idea. The official quoted in the report said calculations show that relief from the government will not be sufficient for the loss-making telco to survive. India Today