Finance Ministry Asks Airtel to Follow Legal Process on AGR Dues-to-Equity Proposal: Report

The Union Finance Ministry is not inclined to consider Bharti Airtel‘s request to convert its adjusted gross revenue (AGR) dues, amounting to Rs 41,000 crore, into government equity, according to senior officials familiar with the matter.

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Also Read: Airtel Seeks Urgent AGR Dues-to-Equity Conversion Amid Mounting Promoter Debt

Airtel’s Equity Conversion Request

Airtel had approached the government with the proposal but was advised to pursue legal recourse for the resolution of its AGR liabilities. “They (Airtel) had approached us, but we told them to follow the legal process on their AGR dues. In the case of Vodafone, the spectrum payment dues were converted into equity,” a senior government official told Business Standard.

In contrast to Airtel’s AGR-related dues, the government had earlier agreed to convert Vodafone Idea’s spectrum payment dues into equity. The conversion resulted in the Centre acquiring a 48.99 percent stake in Vodafone Idea.

Had Airtel’s request been approved, the government would have acquired between 2 and 4 percent equity in the telecom company.

Also Read: Government Stake in Vodafone Idea Rises to 48.99 Percent After Fresh Equity Allotment

Airtel Cites Debt Burden

Airtel recently wrote to the Department of Telecommunications (DoT), requesting that over Rs 41,000 crore of AGR dues be converted into government equity.

According to reports, Airtel, in its communication to the DoT, also highlighted the high debt burden of its promoter entity, Bharti Telecom (BTL), and emphasised the need to strengthen its balance sheet to enable greater investments in infrastructure and emerging technologies.