New Delhi: A day after telecom giant Vodafone Idea Ltd (VIL) decided to convert interest on dues to equity into equity, the company on Wednesday said the government does not want to take over the operations of the telecom company. VIL Managing Director and Chief Executive Officer Ravindra Takkar told reporters in an online briefing on Wednesday that the current promoters are fully committed to managing and running the company’s operations amid the government’s refusal to take over the management. .
Takkar said that the government’s announcement of a series of revivals has helped assuage the concerns of investors in the sector. He expressed hope that Vodafone Idea will continue with its plans to raise finance. Debt-ridden VIL on Tuesday decided to convert interest arrears of about Rs 16,000 crore to the government into equity. This would be equivalent to the government’s approximately 35.8 per cent stake in the company.
If this happens, the government will become one of the largest shareholders of the company. The company currently has a debt of about Rs 1.95 lakh crore. On completion of this plan, the government’s stake in the company will be around 35.8 per cent, while that of the promoters will be around 28.5 per cent (Vodafone Group) and around 17.8 per cent (Aditya Birla Group). Takkar said the DoT’s letter regarding the option of converting interest on dues into equity does not contain any condition that seeks to place the government on the board of directors.
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He said that the existing promoters are fully committed to manage the operations of the company. He said, “Our entire dialogue with the government turned out to be a package. Even after the announcement of the package, the government made it clear that it does not want to take over the operations of the company. There is no intention of the Government to take over the operations of the Company. It wants to have three private companies in the market and the government does not want monopoly or only two companies to dominate the market.”
Takkar said, “The government has made it clear that the promoters of the company should run it and take it forward.” The entire process is expected to be completed in the coming months, he added. He said that since most of the company’s liability is towards the government, converting some debt into equity is a good option to reduce its debt burden. Takkar said the promoters have sought to amend the existing shareholder agreement and reduce the “minimum eligibility limit” from 21 per cent to 13 per cent, with the aim of retaining their existing governance powers, including the appointment of directors and officers in certain key positions. mutually agreed upon.
On the finance raising plan, he said the revival measures taken by the government sent a positive signal to the investors and would help allay some of the concerns and apprehensions. Takkar said, “This process is positive from the point of view of raising finance, investors have also termed it positive in their response.” (agency)