The government is expected to come out with detailed guidelines for conversion of interest payment liabilities of telecom players into equity within a month, a senior official said on Thursday.
Under the telecom reforms package announced last year, three debt-ridden telcos — Vodafone Idea Ltd (VIL), Tata Teleservices Ltd (TTSL) and Tata Teleservices (Maharashtra) Ltd (TTML) — have proposed to convert their respective interest liabilities payable to the government into equity.
Post conversion of the liabilities, the government is projected to have a 35.8 per cent stake in VIL and around 9.5 per cent shareholding each in TTML and TTSL.
”The details of conversion of dues into equity has to come from the finance ministry. DIPAM (Department of Investment and Public Asset Management) is likely to work on the details and then send it to the Department of Telecom (DoT). The process should not take more than a month,” the senior government official told PTI.
VIL has estimated the interest liability dues payable to the government at around Rs 16,000 crore, TTSL at about Rs 4,139 crore and TTML at around Rs 850 crore.
On Wednesday, Telecom Minister Ashwini Vaishnaw said that even after conversion of dues into equity, the liability to pay past and future debt will remain with the telecom companies.
”Government will remain an investor only. The companies will be run by professionals. All the debt liabilities will remain the responsibility of the companies. The companies have given us commitment,” Vaishnaw had told PTI.
VIL has proposed to allocate preferential shares to the government at Rs 10 per share, which according to analysts is at 58 per cent premium based on the share price at the relevant date of August 14, 2021.
On whether liability of payment for upcoming spectrum auction will be on the government, Vaishnaw had said the companies will have the entire responsibility for the payment for radiowaves and there will be no burden on the government.
He had also said the government has just extended a helping hand as part of the telecom reforms package to lower burden on them, save and create jobs as well as ensure healthy competition in the industry.
”We will exit from the companies at an appropriate time. Government will not interfere in day to day operations of the company. They will continue to be professionally managed,” Vaishnaw had said.
The telecom ministry, on Wednesday, had also said the three companies will not become public sector undertakings even after the government gets a stake in them. PTI