Govt Will Acquire 33% Stake In Vodafone-Idea Only After Share Price ‘Stabilises’ To Rs 10 Or Above

The government will acquire a stake in debt-ridden telco Vodafone Idea after the stock price of the company stabilizes at ?10 or above.

The company board has offered a stake to the government at a par value of Rs 10 per share which was cleared by the finance ministry in July.

Operators in the country were previously offered the option to pay the interest for four years of deferment on the deferred spectrum installments and AGR (adjusted gross revenue) dues by way of conversion into equity of the NPV of such interest amount.

Shares languishing below ? 10

The Department of Telecom will clear the acquisition of shares in the company after VIL shares stabilize at ? 10 or above.

This is in accordance with a Securities and Exchange Board of India (SEBI) norm that requires acquisitions to take place at par value. 

VIL shares have been trading below ? 10 since April 19.

The finance ministry had cleared the proposal to acquire a stake in VIL in July.

A third of the company

The company has opted to convert about ? 16,000 crore of interest liability which it owes to the government.

Post acquisition, its promoters will reportedly have a 50 percent stake, down from nearly 75 percent, while the government will have a 33 percent stake. 

Total gross debt

At the end of the April-June 2022 quarter, VIL’s total gross debt (excluding lease liabilities and including interest accrued but not due) stood at ? 1,99,080 crore.

This comprises deferred spectrum payment obligations of ? 1,16,600 crore, AGR liabilities of ? 67,270 crore that are due to the government, and debt from banks and financial institutions of ? 15,200 crore.