Vodafone-Idea AGR Dues: Government to own 35.8% stake in Vodafone-Idea, the board approves plan #VodafoneIdea

Vodafone-Idea AGR Dues: The board of Directors of Vodafone-Idea has informed the media on Tuesday that “It has been decided in our board meeting held on Monday to convert the entire interest amount of the company’s outstanding spectrum auction instalments and adjusted gross revenue (AGR) into equity.

Let us tell you, as a result of this conversion, the stake of all the existing shareholders of the Vodafone and Idea merged company including the promoter will be diluted and the government will take a third stake in Vodafone-Idea.

According to the Company’s best estimates, subject to confirmation by the DoT, the Net Present Value (NPV) of this interest is estimated to be around ₹16,000 Crore.

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As the average price of the company’s shares was below the par value on August 14, 2021. Therefore, shares will be allotted to the government at a value beyond Rs 10 per share.

This proposal is also subject to the approval of DoT. It is worth noting that after this conversion, the government’s stake in Vodafone-Idea will be around 36%.

It is worth noting that earlier this month, another telecom company Bharti Airtel had informed that it would not exercise the option of converting its outstanding spectrum and interest amount on AGR into equity under the reform package.

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The government had given companies the option of moratorium instead of equity. Under this, the company will give more than 35% equity to the government. The promoters’ shareholding in the company will come down to 46.3%.

(With inputs from Moneycontrol)