The board of directors of Vodafone Idea has approved the conversion of the full amount of interest related to spectrum auction instalments and adjusted gross revenue (AGR) dues into equity, the telecom player said in a regulatory filing on January 11.
"The Net Present Value (NPV) of this interest is expected to be about Rs 16,000 crore as per the Company’s best estimates, subject to confirmation by the 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. The conversion will therefore result in dilution to all the existing shareholders of the Company, including the Promoters," Vodafone Idea said.
"Following conversion, it is expected that the Government will hold around 35.8% of the total outstanding shares of the Company, and that the Promoter shareholders would hold around 28.5% (Vodafone Group) and around 17.8% (Aditya Birla Group), respectively," it added.
As a part of relief package in October 2021, the Department of Telecommunications had laid out various options for clearing the statutory dues, following which, the Vodafone Idea opted for deferring payment of spectrum auction installments & AGR dues by 4 years.
However, the telecom companies were also required to pay interest on these dues during the moratorium period. The DoT, had further given a 90-day window to the telcos to decide if they want to opt for converting the interest amount pertaining to the moratorium period into equity.