Vodafone Idea Promoters Have Yet Another Request from the Government

Vodafone Idea has been raising funds from external sources as well as promoters to compete with its industry rivals Jio and Airtel. The cash-strapped telco has set the end of March as the deadline for raising new funds. The board of Vodafone Idea earlier this month approved raising Rs 14,500 crore from its primary promoters – UK’s Vodafone Group as well as Aditya Birla Group (ABG) along with other external investors.

Highlights

  • The cash-strapped telco has set the end of March as the deadline for raising new funds.
  • The process of conversion of accrued interest on deferred AGR requires some time to get clearances.
  • The normal procedure of conversion includes clearance from Dipam.

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Vodafone Idea

The telecom giant Vodafone Idea and its promoters have urged the government to fasten the conversion process of interest on deferred adjusted gross revenue (AGR) dues into government equity. It is very necessary for the financially struggling Vodafone Idea so that it can raise funds from external investors. An anonymous senior official has informed that the executives of the telco have talked with the government about conversion increasing the chances of having more external investors.

Vi Needs to Raise Funds

For those unaware, Vodafone Idea has been raising funds from external sources as well as promoters to compete with its industry rivals Jio and Airtel. The cash-strapped telco has set the end of March as the deadline for raising new funds. The board of Vodafone Idea earlier this month approved raising Rs 14,500 crore from its primary promoters – UK’s Vodafone Group as well as Aditya Birla Group (ABG) along with other external investors. The telecom operator is all set to raise Rs 4,500 crore which is approximately $600 million through preferential shares issued at Rs 13.30 per share to its promoters as well as related companies. Moreover, the telco has announced raising another Rs 10,000 crore via equity and debt instruments.

As far as the government officials are considered, they say that the process of conversion of accrued interest on deferred AGR requires some time as it needs various clearances. The government official said that the normal procedure of conversion includes clearance from Dipam (Department of Investment and Public Asset Management) which could be time-consuming.

For those unaware, Vodafone Idea had decided to convert the interest accruing on the deferred AGR payment into government equity earlier this year. The calculations from the company suggest that this would result in being the largest shareholder in the company with a 35.8% stake. Moreover, the government is also considering the option to return bank guarantees withheld by the Department of Telecommunications (DoT) as security against the AGR payments. If this gets approved, Vi is potentially going to receive Rs 15,000 crore in funding reducing its burden down to raising only 20% of this amount a year before it is due to clear the principal AGR dues.

Reported By

Anupam has been a tech enthusiast for a while and is always on the feet to know about the new launches whether it is smartphones or any other devices. He’s trying to share this passion with the help of his writing skills. Apart from these he’s also a pursuing freelance digital artist and loves creating artworks.

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