The statement comes after Vodafone Idea shares crashed, with the decision to convert interest liability of Rs 16,000 crore payable to the government into equity.
A day after being picked up by Vodafone Idea Ltd. Convert interest on due amount to government equity, its CEO said on Wednesday that the government has made its position completely clear that it does not want to run the telco, and added that the existing promoters are fully committed to managing and running the company’s operations.
Vodafone Idea (VIL) on Tuesday announced an option to convert interest liability of about Rs 16,000 crore payable to the government into equity, which will hold around 35.8% stake in the company.
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If the plan goes through, the government will become the largest shareholder in the company which is burdened with debt of around ₹ 1.95 lakh crore.
VIL’s managing director and CEO Ravinder Takkar told reporters in a virtual briefing that the DoT’s letter does not lay down any condition on equity conversion option, which allows board seats for the government. He said that the existing promoters are fully committed to managing and running the operations of the company.
“In all our conversations with the government leading up to the package and even after the announcement of the package, it has been clearly stated by the government that they do not want to run the company. They do not have the will to handle it. … they want three private players in the market, they don’t want a monopoly or a monopoly,” the VIL CEO said.
The government has “made it clear that they want the promoters of this company to take this forward”, he said, adding that VIL expects no change in its position.
Mr Takkar further said that he expects the entire process to be finished in the coming months.
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On the rationale for the decision, VIL’s top boss said that given that the majority of the debt of the telco is on the government, “it was clear to us that converting some of the debt into equity was a good option for the company to reduce its debt.” is onwards”.
Since the average price of the company’s shares as on the relevant date was below par, the equity shares would be issued to the government at a par value of ₹10 per share, he explained.
After the conversion, Vodafone Group’s stake in the company will be around 28.5% and that of Aditya Birla Group will be around 17.8%.
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