Vodafone Idea Debt Conversion: Govt to Hire Advisor

The Indian government is looking to hire an advisor to help with the conversion process of Vodafone Idea’s debt into equity. This advisor will aid the centre in determining the amount of adjusted gross revenue (AGR) and deferred spectrum payments which need to be converted into equity for the government.

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For the unaware, Vodafone Idea (Vi) had earlier announced that it would be opting for the option to convert the dues into equity for the government. Tata Teleservices had also said the same; however, later, the company walked out of its decision. Thus, Vi is now the only private telecom services company in which the government will have a stake in. We are not talking about a small stake, though.

According to the estimates shared by Vi, the Indian government will get a 35.8% stake in the company, which would then be more than what any other individual promoter holds.

Government to Do Own Math for Vodafone Idea Equity

According to a Mint report, the Indian government will be hiring an advisor to aid with the debt to equity conversion of Vodafone Idea. The centre is planning on doing its own math with regards to how much equity it should get in the company. This will take a bit of time as an external advisor from the firms chosen by the Department of Investment, and Public Asset Management (DIPAM) will be included too.

Regardless of the kind of stake, the government will hold in the company; it won’t turn into a public sector unit (PSU). The Government of India (GoI) had issued a statement saying that it has no plans of converting Vi into a PSU and it will look to sell its stake when things stabilise for the company.