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Govt to become single largest shareholder in Vodafone Idea, will hold 35.8 per cent

According to the BSE filing, the Board of Directors authorised the conversion of the whole amount of such interest linked with spectrum auction instalments and AGR Dues into equity at its meeting on January 10, 2022. As a result of the conversion, all firm's current shareholders, including the promoters, will be diluted.

Govt to become single largest shareholder in Vodafone Idea will hold 35 dot 8 per cent gcw
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New Delhi, First Published Jan 11, 2022, 11:37 AM IST
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Vodafone Idea stated in a regulatory statement filed on January 11 that the board of directors has authorised converting the whole amount of interest related to spectrum auction instalments and adjusted gross revenue (AGR) dues into equity. According to the BSE filing, the Board of Directors authorised the conversion of the whole amount of such interest linked with spectrum auction instalments and AGR Dues into equity at its meeting on January 10, 2022. As a result of the conversion, all firm's current shareholders, including the promoters, will be diluted.

According to the company's best calculations, the Net Present Value of this stake is projected to be around Rs 16,000 crore, pending confirmation by the DoT. Because the average price of the company's shares on the relevant date of 14.08.2021 was less than the par value, the equity shares would be granted to the government at a par value of Rs 10/- per share, subject to final DoT approval. As a result of the conversion, all company's current shareholders, including the Promoters, would be diluted, it noted.

The shares may be held via the Unit Trust of India's statutory undertaking on behalf of the Government of India or through any trustee-type or other suitable arrangement. Following the conversion, the government will control about 35.8 per cent of the company's total outstanding shares. Simultaneously, the Promoter shareholders will own roughly 28.5 per cent (Vodafone Group) and 17.8 per cent (Aditya Birla Group).

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According to the network service provider specified in the announcement, the rights are subject to a minimum qualifying criterion of 21% for each promoter group. Following the board's approval, the promoters have changed the current SHA to decrease the minimum qualifying criteria from 21% to 13%. The corporation stated that the Articles of Association would be amended (AoA).

The Department of Telecommunications (DoT) had provided Vodafone Idea with different choices to telecom firms to clear the outstanding AGR dues. Vodafone Idea chose to postpone spectrum auction payments and AGR dues for four years. The DoT also gave the telecom operator 90 days to convert the interest that would accrue on instalment payments during the moratorium period into equity.

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