NEW DELHI The Union government will neither take a seat on the board of Vodafone Idea nor will it run or manage the company, the telco’s managing director and principal superintendent Ravinder Takkar on Wednesday. The advertisement comes a day after the company decided for conversion of interest on promptness of acclimated gross profit (AGR) and diapason instalments pretenses of about ₹ crore into equity, making government the single largest shareholder at35.8 in the carrier.
Vi’s shares recovered9.75 to ₹12.95 on the BSE on Wednesday, after crashing20.54 to close at ₹11.80 on Tuesday.
“ The government is veritably clear, they want us to run the company, they want the promoters to run the company and that’s what we intend to do going forward as well,”Takkar said in a media briefing on Wednesday.
“ It has been veritably easily stated by the government that they don’t want to run this company. They don’t have the desire to take over the operations of this company. They want three private players in the request. They clearly don’t want it duopoly or a monopoly,”he added.
On asked whether the government will take a seat on the board, Takkar clarified that the letter issued by the telecom department on the option of choosing to convert interest to equity doesn’t mention any condition which allows the government to have a seat on the board.
“ The government has shown no intention or they’ve we believe that they’ve no understanding of nominating any board members and we do not anticipate any board members to be there. So, the Board of the company will continue and all the operations as they’ve been will continue the way they’ve been so far,”he emphasised.
Takkar said the company chose the on- time option to convert interest on pretenses into equity outspoken as it was the stylish option to reduce the debt burden andde-leverage more so since utmost of the debt is owed to the government.
“ The company has a significant quantum of a debt, we’ve a stretched balance distance and anytime there is an option to convert that debt to equity is considered positive for the company and especially considering that utmost of the debt is to the Government of India, it was clear to us that actually converting some of that debt into equity it’s a perfect option for the company to reduce its debt going forward,”Takkar said.
Vi took the four- time doldrums on diapason and AGR, which will probably produce significant cashflow savings of about$ 11 billion from FY22 till FY25, judges at CLSA said in a note on Tuesday. But they refocused to the company’s diapason burden which was the loftiest at ₹ billion, or$14.7 billion, compared to Reliance Jio’s at about ₹ 656 billion or$8.9 billion and Bharti Airtel’s at ₹ 627 billion or$8.5 billion. Also Vi’s AGR liability stands at a massive ₹ 634 billion or$8.7 billion, taking its total debt to over ₹1.7 lakh crore.
Takkar noted that with the government getting a shareholder, it’ll also make a return on this equity stake making it a‘ palm- palm situation’for every side.
He said that Vodafone India will continue with its plans to raise finances as transnational investors were interested in the company. The company may advertise the plans shortly.
“ We’ve been engaged with investors for some months now. I can confirm again, veritably explosively that there’s a huge interest in investors, especially into transnational investors in investing in India. They are interested not only in India, they are interested in the telecom sector and we ’ve had relations with several of them,”he said.
He added that the crucial enterprises of the investors-of whether India will be a three- player telecom request, whether government will bring out reforms for the worried sector and whether it’ll give liquidity and fiscal support to the sector – have been addressed by the structural reform package that was blazoned by the government in September 2021.
“ Easily, this should be a positive sign for the investors and should help relieve some of the fears or some of the enterprises. this process is positive for the fund rise, clearly has been positive from investment feedback and I would love to continue forward as we’ve been on the fundraising process and to actually be back shortly to advertise some conclusion to the fund- raising process,”he further stated.
On Tuesday, Vodafone Idea told the exchanges that the Indian government will come the largest shareholder in Vodafone Idea and will hold35.8 at ₹ 10 per share, with Vodafone Group holding28.5 and Aditya Birla Group holding17.8, following the conversion.
Takkar said that the net present value of ₹ crore of pretenses can change grounded on the conversations with Fleck since the company had given its computations to the department and a final quantum will be verified post the conversations. He added that the process will take a many months but anticipated it to completed soon. Post the blessing, preferential shares will be issued to the government and papers of association will be accordingly approved in its periodic general meeting.
