The board of directors of telecom operator Vodafone India, on Tuesday, approved the conversion of interest on spectrum auction instalments and adjusted gross revenue (AGR) dues into equity. To provide relief to the company, the Department of Telecom (DoT) had provided it with a one-time opportunity to exercise the option for upfront equity conversion.

The shares will be issued to the government on a preferential basis and the net present value for the interest amount will be around Rs 16,000 crore for the company. Following the conversion, the government will hold around 35.8 percent in Vodafone Idea, while the total promoter holding will be around 46 percent.

In a press conference, on Wednesday, Ravinder Takkar, MD & CEO, Vodafone Idea, said that the decision to convert debt into equity will be a positive one for the company as it will help to reduce the mounting debt in its books. He believes it will be a win-win situation for everyone.

He, however, clarified that the company has shared its calculations with DoT and is awaiting its certification.

Also Read: Vodafone Idea jumps 8%; management says debt to equity conversion a positive

The management said that in all its interactions with the Centre, the government has been been very clear about wanting a three private player industry. Putting all the rumours to rest, Takkar said that the Centre has no intention of running the company. He added that the promoters of Vodafone-Idea will continue to handle its daily affairs, like before, as long as Aditya Birla Group and Vodafone Group Plc holding remains 26 percent.

According to Takkar, the government has no intention to have its own representative on the board either. However, he said that the company will be having a discussion in this regard with DoT to have the numbers finalised.

Also Read: Good start for Vodafone Idea but won’t be enough, says Deutsche Bank

On further capital infusion, Takkar said that the company has been in talks with several investors in the last few months. He explained that the conversion of debt into equity is a huge positive for the investor community. He said that from their talks, it is apparent that investors are interested in investing in India, and especially in the telecom sector.

To know more, watch the accompanying video.

First Published:Jan 12, 2022 2:03 PM IST