Vi won’t convert dues to govt equity

Vodafone Idea has decided against converting the accrued interest on its deferred adjusted gross revenue (AGR) dues of ₹8,837 crore for FY18 and FY19 into equity that was to be held by the Union government, said two people in the know, seeking anonymity.

The telecom operator had to decide on the equity conversion for FY18-19 by 15 September. The Centre provided telcos with an option to take a four-year moratorium (FY22 to FY25) for dues till FY19, that could be converted to equity. In June, Vi opted to take the four-year moratorium for paying additional dues of ₹16,000 crore till 2016-17 and converting to 33% equity, which will be owned by the Centre. It is awaiting approval from the Department of Telecommunications (DoT).

The Centre’s move was part of a relief package announced in September 2021, for AGR dues till FY17.

The scheme was extended to all carriers to help improve the financial health of the sector, battered by high debt and low tariffs .

Once the DoT approves the conversion of AGR dues of up to FY17 for Vi, the government will become the single-largest shareholder with a 33% stake, while promoter shareholding in Vi will fall to 50% from the near 75% currently.

Officials said the Centre was waiting for Vi’s share price to settle above the ₹10 mark before proceeding with the conversion as it will be done at a par value.

If Vi had opted for conversion of the additional interest to equity as well, the Centre’s stake would have risen beyond 33%. In a note, researcher CLSA warned on Thursday that the government’s share in Vi may rise to 88% after FY26 if the company fails to make the annual payments of about $5 billion and the government decides to convert its debt into equity. LiveMint