Voda Idea down 20 percent as board approves conversion of govt dues into equity
Published On: Tuesday, January 11, 2022 | By: Team KnowMyStock
Shares of Vodafone Idea slumped 20 percent to Rs 12.05 on the BSE in Tuesday’s intraday trade after the telecom company’s board approved a plan to convert the full amount of interest related to spectrum auction installments and adjusted gross revenue (AGR) dues into government equity."Since the average price of the Company’s shares at the relevant date of 14.08.2021 was below par value, the equity shares will be issued to the Government at a par value of Rs 10/- per share, subject to final confirmation by the DoT. The conversion will therefore result in dilution to all the existing shareholders of the Company, including the Promoters," Vodafone Idea said. The new shareholding structure at Vodafone Idea, with the government, set to hold around a 35.8 percent stake, could turn out to be a significant breakthrough for the financially-stretched mobile operator. It leaves Vodafone with a 28.5 percent holding, while the Aditya Birla Group's stake will be at 17.8 percent.
According to the company’s estimates, the net present value of the interest is expected to be Rs 16,000 crore.
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