Vodafone Idea has opted to offer 35 per cent stake to the Government against outstanding payments related to spectrum auction instalments and AGR dues.
“It is now informed that the Board of Directors, at its meeting held on 1January 10, 2022, has approved the conversion of the full amount of such interest related to spectrum auction instalments and AGR Dues into equity. The Net Present Value (NPV) of this interest is expected to be about ₹16,000 crore as per the company’s best estimates, subject to confirmation by the DoT,” Vodafone Idea said in a stock exchange filing.
The shares may be held through the statutory undertaking of the Unit Trust of India (SUUTI) on behalf of the Government of India or by any trustee-type or other suitable arrangement.
Share dilution
Since the average price of the company’s shares was below par value , the equity shares will be issued to the Government at par value of ₹10/- per share, subject to final confirmation by the DoT. The conversion will therefore result in dilution to all the existing shareholders of the company, including the promoters. Following conversion, it is expected that the Government will hold around 35.8 per cent of the total outstanding shares of the company, Vodafone Plc would hold around 28.5 per cent and around 17.8 per cent will be with Aditya Birla Group
“The rights are subject to a minimum Qualifying Threshold of 21 per cent for each promoter group, and in light of the conversion of interest into equity, the promoters have mutually agreed to amend the existing SHA for reducing the minimum Qualifying Threshold from 21 per cent to 13 per cent for the purpose of exercising certain governing rights such as appointment of directors and relating to appointment of certain key officials etc,” the company said.
