The Centre has given Vodafone Idea, Bharti Airtel and Reliance Jio till October 29 to decide whether they would opt for a four-year moratorium on adjusted gross revenue (AGR) related dues which runs from FY22-23 through FY25-26, a part of the relief package approved last month.
In a letter to the telecom majors, the Department of Telecommunications (DoT) also said the telcos must decide within 90 days whether they would want to convert into equity the accrued interest during the moratorium.
The shares of the telecom company would be held through the Unit Trust of India, “or by any trustee type or other suitable arrangement, which may be worked out by the government,” according to a report in ET that cited the DoT letter.
Further, the telecom department has said the “present value of the interest” on the deferred AGR-related and spectrum auction dues during the moratorium period would be treated as a loan to the telco.
Last month, the Cabinet had approved a much-needed relief package for the embattled telecom sector that includes a four-year break for telcos from paying statutory dues, the go-ahead to share scarce airwaves, change in the definition of revenue on which levies are paid, and 100 per cent foreign investment via the automatic route.
The financial daily citing the DoT communication mentioned that the Centre may change any part of such loan to “preference shares, instead of equity shares and such preference shares may be optionally or compulsorily convertible and/or redeemable and/or participating in nature.”
The relevant date for pricing the share issue will be 14 August 2021.
The price of the preference share “shall be equal to the higher of the average of weekly high and low of the volume weighted average price of the equity shares during the last 26 weeks preceding the relevant date or the two weeks preceding the relevant date; subject to the provision under Section 53 of the Companies Act, (i.e. shares cannot be less than par value)”, the DoT letter said.
The telecom department, in its letter, clarified that the companies which opt for the equity conversion option must provide their historical audited financial statements.
Last month, Bharti Airtel chairman Sunil Bharti Mittal had said that the telecom major would opt for the four-year deferred option for AGR dues and spectrum payments, which would provide Rs35,000-40,000 crore in cash to infuse in networks and technology.
