Vodafone Idea is facing a lot of problems because of no communication from the Indian government about the interest dues conversion into equity. Because the government is not saying anything, the telco has been finding it difficult to go ahead with fundraising. Even the approval that the telco got for issuing OCD (optionally convertible debentures) to the American Tower Company (ATC) is no more valid as the government is not moving ahead with the conversion of debt to equity. For the unaware, one of the conditions for the OCD to be issued to ATC was the conversion of interest dues into equity for the government.
In a filing at the stock exchanges, Vodafone Idea said that since the company has not received any communication from the government of India on the conversion of dues to equity, the issuance of OCDs to ATC has not been completed. Further, the validity period of 15 days from the shareholders' resolution date for the OCD issue to ATC has expired. Thus, the company will have to look for fresh approval from the government and is also in discussion with ATC for an extension of the agreement.
Vodafone Idea had decided to pay off the Rs 1600 crore dues to ATC by issuing OCDs, which could be converted into equity if the debt was unpaid after 18 months from the date of issue. The telco had got the approval from its shareholders to go ahead with the move.
In related developments, ATC had said in a filing at the SEC (Securities and Exchange Commission) that Vi's OCD issue is subject to conditions that may not be fulfilled. The condition that ATC was talking about is the government converting dues into equity in the company. Further, Vi has told ATC that for now, it make partial payments while it will start full payments from January 2023.
