managing director Ravinder Takkar Wednesday said the government would not participate in the management of the company and that the article of association had been amended to allow voting rights to shareholders with stake over 13% in the company, allowing promoters to participate in decision making even if their share falls under 21% each, like in the case of the Aditya Birla Group.
“The government has made it amply clear to me in several meetings that the only purpose of permitting telcos to convert the interest component into equity was to destress the sector and save it from monopoly or duopoly, not to participate in management,” Takkar said a day after the company informed the stock exchanges that it had opted to convert interest on adjusted gross revenue (AGR) and spectrum dues into government equity of around 35.8%.
Vi’s share was trading 7.2% up at Rs 12.65, a day after it plunged over 20% on fears arising out of the future of the company now that the government would become a majority shareholder with a possible 35.8% stake.
This resulted in Vodafone Group Plc’s holding falling from 44.39% to 28.5% and Aditya Birla Group’s holding from 27.66% to 17.8% in Vi, relegating them to second and third-largest shareholders in the telecom operator.
Takkar also said the move to convert government debt arising out of interest due to it would help capital raising. “ We owe a lot of debt to the government and so converting that into equity was a good option for us. It will help attract investors,” Takkar said.
According to Vodafone Idea’s calculation, the estimated net present value (NPV) of its outstanding debt to the government on deferred spectrum payment and AGR dues at Rs 16,000 crore and at a value of Rs 10 per share, the stake offered to the government is 35.8%.