Vodafone Idea Ltd CEO on Wednesday clarified that 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 company’s operations. He added that the company has a stretched balanced sheet, and thought converting debt to equity was a good option.
VIL Managing Director and CEO Ravinder Takkar told reporters in a virtual briefing that there is no condition in the Telecom Department’s letter on equity conversion option, which allows for board seats for the government and the center has shown no interest in appointing a board member at the telco.
Vodafone Idea (VIL) on Tuesday announced its decision to opt for converting about ₹16,000 crore interest dues liability payable to the government into equity, which will amount to around 35.8% stake in the company.
Following the conversion, the Indian government will hold about 35.8% of the total outstanding shares of the company, and the promoter shareholders Vodafone Group would hold around 28.5% and Aditya Birla Group around 17.8%.
“In all of our interactions with the government leading up to the package and even after the announcement of the package, it has been clearly stated by the government that they do not want to run the company. They want three private players in the market, they do not want duopoly or monopoly,” VIL CEO said.
The government has “made it clear they want promoters of this company to run it going forward”, he said, adding that VIL expects no change in their position. Takkar further said he expects the entire process to conclude in the coming months.
On the rationale for the decision, the VIL top boss said that given that most of the telco’s debt are to the government, “it was clear to us that converting some of debt to equity is a good option for the company to reduce its debt going forward”.
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