NEW DELHI: Vodafone Idea<\/a> (Vi) has decided against converting accrued interest on deferred adjusted gross revenue (AGR)-related dues for FY18 and FY19 into equity.
The company is set to inform the Department of Telecommunications<\/a> (DoT) that it won’t opt for such equity conversion, people aware of the matter told ET.
The decision is significant as the government is yet to take a call on converting Vi’s Rs 16,130-crore accrued interest on deferred AGR-related dues up to FY17 into equity.
The AGR-related dues for FY18 and FY19, which amount to Rs 8,837 crore, were not part of the Supreme Court<\/a>’s ruling on AGR.
Loss-making Vi had on June 22 opted for a four-year deferment of these additional dues. But it needs to inform the DoT by tomorrow (September 16) on whether it would also opt for conversion of the accrued interest on such deferred AGR-related dues (for FY18 and FY19) into equity.
A query to Vi remained unanswered at the time of going to press.
Apart from Vi, Bharti Airtel<\/a> had also opted to defer the additional AGR dues for FY18 and FY19, which were not tabulated in the Supreme Court order.
The DoT had offered all telcos the four-year moratorium option -- from FY22 to FY25 -- for dues up to FY19, which were not tabulated in the Supreme Court’s AGR order. The department had also given them the option to convert the accrued interest on such dues into equity.
As reported by ET earlier, the finance ministry has already cleared the proposal to convert Vi’s Rs 16,130-crore worth of accrued interest on deferred AGR-related dues into equity. The ball is now in the telecom department’s court, which must finalise the transaction as per the package announced earlier.
The DoT is expected to finalise the equity conversion when the telco's stock price remains above its Rs 10 par value. The Vodafone Idea<\/a> stock closed 1.13 % lower at Rs 9.64 on the BSE Thursday.
The equity conversion, which was subject to government confirmation, has been pending since January this year. It is vital for the company to conclude its long-pending Rs 10,000 crore external fundraise via equity as potential investors want clarity on this issue.
The carrier is also talking to banks for another Rs 10,000 crore in debt as it needs to invest in its 4G network and roll out 5G to effectively compete with rivals Reliance Jio<\/a> and Bharti Airtel and stem subscriber losses.
Besides, the beleaguered firm needs cash to clear some of its near Rs 15,000-crore trade payables, comprising dues to tower companies, network gear vendors and other suppliers.
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