Tata Teleservices (Maharashtra) Limited (TTML) has decided to abstain from converting its accrued interest on deferred AGR dues into government equity. As per government’s calculation the amount to be converted stood at Rs 1.95 billion. The operator believes the amount as per the government’s calculations to be much lesser than what it had estimated (Rs 8.50 billion).
Thereafter, the board of directors of the company decided to withdraw the desire expressed for conversion. To this end, the company informed the Department of Telecommunications (DoT) that the company is not desirous of opting for conversion of interest into equity.
Meanwhile, the difference between DoT and TTML occurred over calculation of net present value (NPV) of accrued interest. The telco had estimated the amount to be approximately Rs 8.50 billion, which would have meant a 9.5 per cent stake to the government. However, DoT had a different amount which was 77 per cent less than the company’s estimates. In case the deal had gone through, it would have led to dilution of all the existing shareholders of the company, including the promoters, Tata group companies, which hold 74.36 per cent stake.
Previously, TTML had opted for this decision as part of the government’s relief package which allowed the option to convert interest on airwaves and adjusted gross revenue (AGR) dues into equity.