Telecom

Vodafone Idea opts defers payment of Rs 8,837 crore AGR dues, gets option to pay interest via equity

If Vi decides to convert interest for AGR dues up to FY17 into equity, the government could end up holding another five to seven percent stake in the company, which could take its overall stake in the company to around 40 percent.

Published:Fri, June 24, 2022 10:59am

By Shweta Ganjoo

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Vodafone Idea, which is also known as Vi, has decided to defer the payment of Adjusted Gross Revenue (AGR) related dues worth Rs 8,837 by a period of four years. The company in its latest filing has revealed that it will pay its AGR dues for the financial years 2018 and 2016 in six annual instalments starting March 31, 2026.

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It is worth noting that Vodafone Idea has already decided to convert the interest accrued on the AGR dues up to financial year 2017 into equity. This move will ensure that the government owns a stake of around 33 percent in the company making it the single largest shareholder. Vodafone Idea's promoters, India's Aditya Birla group and UK's Vodafone Group, collectively own a 50 percent stake in the company.

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Vodafone Idea in the same filing said that the Department of Telecom had offered the company a moratorium of four years for all AGR related dues up to financial year 2018-19 that were not included in Supreme Court order dated September 1, 2022, to which the telecom company needs to respond to within 15 days by June 30. DoT had offered a similar moratorium to Bharti Airtel for its dues of about Rs 3,000 crore. The company has said that it will respond to the order by the deadline of June 30. Reliance Jio, on the other hand, has paid all its dues.

Vi also said that, "The said DoT Letter also provides the Company an option for equity conversion of interest dues upfront for these AGR related dues for which a period of 90 days has been provided from the date of the said DoT Letter."

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Now, Vodafone Idea hasn't made a decision regarding converting the interest accrued on the AGR dues up to financial year 2017, into equity by the government. But if the company does take that route, the government could end up holding another five to seven percent stake in the company, which could take its overall stake in the company to around 40 percent.

In a separate filing, the company has agreed raising a sum of Rs 436.21 crores from UK's Vodafone Group at Rs 10.20 a unit. The move is likely to help the cash-strapped company to invest in its infrastructure and participate in the upcoming 5G spectrum auctions in the country.

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