A few days after clarifying that there was no such rule that prevented the Department of Telecommunications (DoT) from taking equity in the telco even if the company’s shares were trading below their par value (RS 10), Vodafone Idea has said that it is yet to hear from the Centre.
In September 2022, the finance ministry cleared a proposal to convert the debt-laden telco’s Rs 16,130 crore worth of accrued interest on deferred AGR-related dues into equity. The equity conversion will give the DoT a 33 per cent stake and make it the largest single shareholder in Vi to finalise its much-delayed Rs 20,000 crore fundraising via a mix of debt and equity.
“We have had no communication from the DoT since April when there was an agreement on the amount to be converted. I also do not know exactly the reason why this is not happening. Government is taking some time,” Vodafone Idea CEO Akshaya Moondra said .
Adding that Vi had exercised the option to convert in January, which was followed by a discussion with DoT Moondra said the DoT had sent them a letter in March. “We had confirmed the amount of conversion, which was agreed between DoT and us, in the month of April…we expect that this (conversion) should happen soon,” the CEO stated said at the company’s fiscal second-quarter earnings call with analysts.
Moondra said Vi’s lenders and potential investors are aware that the conversion is vital to the pending fundraise, which is required for both 4G coverage expansion and 5G rollout. The cash-strapped telecom operator is in dire need of money to clear huge vendor dues, including nearly Rs 7,000 crore to Indus Towers alone.
Vi is the only telco among the private carriers who hasn’t yet been able to tie up 5G vendor deals.
Meanwhile, Vi in the interim had told the government that its lenders want clarity on the government shareholding before committing funds.
Vi dues
The telco has proposed to clear dues of its other large vendors by issuing convertible debentures on the lines of American Tower Corp (ATC) deal but is yet to get a response from the, the CEO shared. “We have offered the proposal to our other large vendors, but it would depend on (respective) vendors’ policies,” Moondra said.
The telecom operator’s net loss for the September quarter widened to Rs 7,595.5 crore sequentially from Rs 7,296 crore. It lost 6 million subscribers — versus 3.4 million in Q1 — during the same period.
