After the board accepts the deal, the government will own 35.8% of Vodafone Idea.
The promoter shareholders will own 28.5 percent of the company (Vodafone Group) and roughly 17.8 percent of the company (Aditya Birla Group).
The board of Vodafone Idea authorised the conversion of the whole amount of interest connected to spectrum auction instalments and AGR dues into equity on Tuesday. Following the conversion, the government would become the company's single-largest stakeholder with 35.8%, followed by the promoter shareholders with 28.5 percent (Vodafone Group) and roughly 17.8 percent (Aditya Birla Group).
"According to the Company's best calculations, the Net Present Value (NPV) of this stake is projected to be around Rs 16,000 crore, pending to confirmation by the DoT." Because the Company's average share price on the relevant date of 14.08.2021 was less than par value,The equity shares would be granted to the government at a par value of Rs 10/- per share, pending final approval by the Department of Transportation. "As a result of the conversion, all current shareholders of the Business, including the Promoters, would be diluted," the company stated in a statement.
A Shareholders Agreement governs the governance and other rights of promoter shareholders, according to Vodafone Idea (SHA). Each promoter group must meet a minimum qualifying criterion of 21% to be eligible for the rights. In light of the board's consent, the promoters have decided to change the current SHA to lower the minimum qualifying criteria to 13% from 21%. The firm's Articles of association Incorporation will be altered, according to the company.The Department of Telecommunications (DoT) has provided Vodafone Idea a few alternatives on the Telecom Reforms Package, according to the teleco. In meetings conducted on October 18 and October 27, last year, the board decided to delay Spectrum Auction Instalments payable for up to four years, as well as AGR related dues for four years.
The Department of Transportation had also given the firm a 90-day window to convert the interest that would accrue on instalment payments during the moratorium period into equity. The amount's NPV was to be determined as of the day the option was exercised.
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