Vodafone Idea Limited (VIL), India's third-largest telecom operator, has begun the search for a new chief executive officer (CEO) as incumbent Akshaya Moondra's tenure concludes in August, LiveMint reported, citing two senior industry executives aware of the development.
Also Read: Indian Government to Raise Stake in Vodafone Idea to 48.99 Percent
Vodafone Idea Begins Search for New CEO
The company, which recently secured a second financial lifeline from the government, is exploring candidates from consumer and technology sectors with strong expertise in distribution, according to the report.
"The search for the new CEO has started and the telco may look at CXOs from Industries like consumer and technology (sectors) who have a strong understanding of distribution," said one of the sector executives, as per the report.
Government Stake Increase on VIL
The Indian government has decided to convert Rs 36,950 crore of VIL's outstanding spectrum auction dues into equity, under the provisions of the September 2021 telecom reforms package. VIL announced this development in an exchange filing on March 30. As a result, the government's shareholding in VIL will increase to 48.99 percent from 22.6 percent. However, VIL's promoters will continue to retain operational control of the company.
Citi's View on Vodafone Idea
The government's decision to convert Rs 36,950 crore of Vodafone Idea's dues into equity is a big positive, Citi said on Monday.
"Additionally, the ongoing launch of 5G services in select cities (Mumbai already launched) should improve sentiment around the company arresting subscriber losses going forward," Citi noted in its report.
Also Read: Banks Wary of Lending to Vodafone Idea Despite Government’s Equity Boost: Report
Bank Lending Prospects
According to another recent report, Vodafone Idea stated that the Indian government's decision to convert part of its dues into equity bolsters the prospects of securing bank credit to the tune of Rs 25,000 crore, as the company seeks to expand and upgrade its telecom network. However, bankers indicated that this move might not provide sufficient assurance for them to lend to the struggling company.
"This liquidity support is a significant boost for the company and strengthens its position in discussions for debt funding," Vodafone Idea said in an email, as per a recent report.
