Vi Will Become Govt Telecom Company? 33% Of Vi Will Be Controlled By Govt After Equity Conversion
In its earnings call for the March-ending on Wednesday, the beleaguered telecom company Vodafone Idea’s managing director Ravinder Thakkar informed that soon the Indian Government will own a 33% equity stake in the company.
To know about when the government will do that and on what criteria, continue reading ahead in the article.
Besides, the cash-strapped telecom company Vodafone Idea has managed to reduce its loss in the March quarter, compared to the figure recorded in the year-ago period.
Govt Will Hold a 33% Stake in Vi: When?
In the telco’s March quarter earnings call this week, Vodafone Idea’s Director Ravinder Thakkar said that once the telco is done converting its accrued interest liability on deferred dues into equity, the Government will hold about 33% of the company’s stake.
When this happens, the telco’s promoters Vodafone PLC and Aditya Birla Group who at present own a 47.61% and 27.38% stake in Vi, will collectively own a 50% stake in the telecom company.
“Post-conversion of interest into equity, the government’s shareholding in Vi will be approximately 33%, while the promoters will hold 50%,” said Thakkar.
The Department of Telecommunications has calculated the net present value of the accumulated interest due to the four-year deferral of spectrum and AGR payments to be given by Vodafone Idea at Rs 16,133.1 crore, as the telecom company confirms the figure.
The telco’s management has informed that it will repay the debt of Rs 8,160 crore over the next 1 year, using its cash margins, and Rs 6,000 crore will be cleared from internal accruals.
“Tariff hike is an industry topic, but the pace (of such hikes) can definitely go faster, and there are opportunities to do this as telecom is still a very small piece of overall consumer spends, and given the value provided to customers, we believe it won’t create any challenges from an affordability perspective,” said Thakkar.