The issuance of bonds to ATC is again subject to conversion of interest dues into equity by the government, Vodafone Idea said. The company has opted for converting about Rs 16,000 crore of interest liability payable to the government into equity, which will amount to around 33% stake in the company, while promoters’ holding will come down from 74.99% to 50%. Vodafone Idea’s proposal to settle Rs 1,600 crore dues with equipment vendor ATC Telecom Infrastructure through issuance of equity convertible debt bonds will now happen on February 28 next year, as per an exchange filing by the telecom operator on Saturday. Both companies have mutually decided to extend the last date of the proposal, which lapsed on December 6, in absence of communication from the government for converting Vodafone Idea’s interest dues into equity. The issuance of bonds to ATC is again subject to conversion of interest dues into equity by the government, Vodafone Idea said. The company has opted for converting about Rs 16,000 crore of interest liability payable to the government into equity, which will amount to around 33% stake in the company, while promoters’ holding will come down from 74.99% to 50%. On Tuesday, the company had said it was in discussions with ATC for extension of the agreement and would also seek fresh shareholders’ approval on the proposal. Vodafone Idea owes about Rs 3,000 crore to its tower vendor ATC.
Last Month, the Company Received Approval From its Shareholders.
for issuance of up to 16,000 optionally convertible debentures (OCDs) having a face value of Rs 10 lakh each, in one or more tranches. The amount, if unpaid in 18 months, would also give an option to ATC to convert the dues into equity at a price of Rs 10 per share. However, one of the conditions set by ATC before taking Vodafone Idea’s proposal was the government’s conversion of the interest dues from deferment of adjusted gross revenue and spectrum dues into equity shares of the company. “As the company has not received any communication from the Government of India on such conversion (interest dues conversion into equity), the issuance of OCDs to ATC has not been completed, within the validity period of the shareholders resolution (i.e. 15 days from the date of passing of the resolution). Accordingly, the shareholders’ resolution has lapsed,” Vodafone Idea had said in an exchange filing. Lately, ATC has expressed concerns over Vodafone Idea’s ability to clear its dues in January. For ATC, the shortfall in payments from Vodafone Idea was about Rs 392 crore in the September quarter. “Based on indications from VIL (Vodafone Idea), we expect to defer recognition of a similar amount for the three months ended December 31, pending resolution. VIL has communicated its intent to fulfil the full amount of its contractual obligations commencing January 1, 2023, although no assurance can be given that this will occur,” the tower company said in a filing to Securities Exchange Commission. At the end of the July-September quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) was at
2.20 trillion, comprising deferred spectrum payment obligations of1.36 trillion, AGR liabilities of
68,590 crore that are due to the government, and debt from banks and financial institutions of15,080 crore.