New Delhi, Jan 12 (PTI) Tata Teleservices Ltd (TTSL) has informed the telecom department that it wants to opt for conversion into equity the interest amount of roughly Rs 4,139 crore pertaining to dues during the moratorium period, a source said.
It is pertinent to mention that listed entity Tata Teleservices (Maharashtra) on Tuesday said it will convert interest on AGR (Adjusted Gross Revenue) dues into equity.
TTSL, an unlisted entity, on Tuesday wrote a separate letter to the Department of Telecom (DoT) on the equity conversion option.
“…TTSL hereby conveys its desire to convert the interest amount of Rs 4,139 crore for the moratorium period (NPV to be firmed up basis the date of conversion) to equity shares of TTSL, subject to a mutual agreement on the terms and conditions, including the rate of conversion to equity, the governance of TTSL post-conversion of the interest amount into equity shares and various regulatory/legal provisions…,” the letter said.
According to the company’s letter, seen by PTI, “as a next step, we request you to kindly provide an opportunity to discuss and mutually agree on the terms and conditions, if any, for us to confirm our acceptance and conclude such conversion”.
An e-mail sent to Tata Teleservices on the issue did not elicit a response.
The interest calculations are based on the Supreme Court’s order dated September 1, 2020, the letter said.
“In case of any dispensation or any other action, which results in a reduction in the interest amount, TTSL reserves its right to avail such benefit,” it added.
On Tuesday, Tata Teleservices (Maharashtra) said it will opt for conversion of the interest related to AGR dues into equity, under the reforms package, and added that post-conversion, the government’s holding in the company is expected to be about 9.5 per cent.
Vodafone Idea Ltd (VIL) has also opted to convert interest on dues into government equity.
On Wednesday, VIL CEO Ravinder Takkar said the government had made its position amply clear that it does not want to run the telco, and added that existing promoters are fully committed to managing and running the operations.
During a virtual briefing, Takkar said there is no condition in the DoT’s letter on equity conversion option, which allows for a board seat for the government.
Further, in light of the conversion of interest into equity, the promoters have mutually agreed to amend the existing shareholder agreement and reduce the ‘minimum qualifying threshold’ from 21 per cent to 13 per cent (each) to retain their existing governance rights, including the appointment of directors and appointment of certain key personnel.
With this, Takkar said, VIL promoters have in fact reaffirmed their commitment to the company.
VIL has decided to opt for converting about Rs 16,000 crore interest dues liability payable to the government into equity, which will amount to around 35.8 per cent stake in the telco. If the plan goes through, the government will become the biggest shareholder in VIL.
Post conversion, Vodafone Group’s shareholding in the company will drop to around 28.5 per cent, and that of Aditya Birla Group to around 17.8 per cent. PTI MBI RAM BAL BAL
source: PTI News