NEW DELHI: Nirmala Sitharaman, the minister of finance, stated on Saturday that rather than taking on Vodafone Idea’s debt, the government has acquired stock stakes in the company. The Centre permitted Vodafone Idea to convert its debts worth Rs 16,000 crore into equity shares on Friday, making it the telecom company’s single-largest shareholder.
The telecom corporation paid fees for using the airwaves, including interest on spectrum payments. The net present value (NPV) on the interest on the spectrum and adjusted gross revenue (AGR) on postponed statutory dues were calculated by the Department of Telecom to be Rs 16,133.1 crores last year.
“We are not bearing their (Vodafone-Idea) obligations,” Sitharaman stated during a press conference on Saturday. The business is not in a position to pay the government what is required. We are buying the company’s stock because of this. This indicates that we own stock in the business. We will share in the company’s profits when they occur.
A representative of the Financial Ministry added, “This is not being done to just one company. The Supreme Court verdict that imposed a retrospective due that had not been accounted for any of the Telecom firms that had come to this company before the AGR problem developed led to the announcement of the plan in September 2021, which was applicable to all Telecom companies.
Since the government proposed a relief package for the telecom sector in September 2021, Vodafone Idea has been anticipating the action.
Added the official: “Every company received relief. Companies had two choices: accept the moratorium and pay the interest, or accept the moratorium and convert the interest into stock. All businesses received this as an offer. Three of them took up the object. Later, two of them claimed not to require the equity conversion option.”
The promoters’ ownership would decrease from 74.99 percent to 50 percent as a result of the conversion of dues into equity, according to earlier statements from VIL. The government would receive about a 33 percent stake in the company.
The government has stated that it will not participate in the operation of the company or have a board representative.
“We wanted a strong guarantee that the Aditya Birla Group would manage the business and provide the necessary funding. Birlas concurred, so we decided to convert. In a statement, Telecom Minister Ashwini Vaishnaw said, “We want India to be a three-player market plus BSNL and provide robust competition for consumers.
The government has ordered the company to convert the net present value of interest connected to deferring spectrum auction instalments and AGR dues into equity shares to be issued to the government of India, Vodafone Idea stated earlier.
The corporation will immediately take all required steps to carry out the aforementioned issuance.
