Vodafone Idea Limited (Vi) and its promoters have urged the government to speed up the process of conversion of interest on deferred adjusted gross revenue (AGR) dues into government equity as the operator believes this move to be critical towards Vi’s efforts to raise funds from external investors.
Vi has opted to convert the interest accruing on the deferred AGR payment into government equity. According to the company’s calculation, this would make the government the largest shareholder in the company with a 35.8 per cent stake and its current promoters, Vodafone Group Plc and ABG’s holding in the company would go down to 28.5 per cent and 17.8 per cent respectively.
Government officials, on their part, say that the process to convert the accrued interest on deferred AGR dues will take its time, since it needs multiple clearances. However, the government is yet to confirm the company’s calculations and is likely to be one of the major reasons for the delay in raising funds.
Earlier, Vi had announced March-end 2022 as the deadline for raising fresh funds for it to subsidise its debt. It began its fund-raising process in the first week of March with its board approving raising of Rs 145 billion from Vi’s promoters – Vodafone Group and Aditya Birla Group (ABG) – and external investors.
Out of this, the Rs 45 billion that it will raise through a preferential share issue at Rs 13.30 a share to its promoters or its related entities should be cleared by end March 2022, with an extraordinary general meeting of shareholders scheduled for March 26, 2022. Meanwhile, raising the more critical Rs 100 billion from external investors is set to be pushed to the next fiscal year.
Separately, the government is also considering returning bank guarantees withheld by the Department of Telecommunications (DoT) as security against the AGR payments. Once approved, Vi is likely to get close to Rs 150 billion. Additionally, the operator has appointed SBI Capital Markets to negotiate the restructuring of loans worth Rs 200-230 billion it is due to repay within the next four years. As of December 2021, Vi had a cash balance of Rs 15 billion and net debt of Rs 1.97 trillion.
