The finance ministry is currently examining Vi’s proposal to convert interest on deferred spectrum and adjusted gross revenue dues into equity and the process is expected to be completed in six weeks. Vi has estimated net present value of interest (NPV) at Rs 16,000 crore and that would result in issuance of 35.8 per cent stake to the government.
According to a report in The Economic Times, TTSL has followed in the footsteps of its listed peer Tata Teleservices (Maharashtra) and opted against conversion of interest into equity. TTSL had informed the government of its desire to convert Rs 4,139 crore worth interest into equity but the proposal was withdrawn as the government’s estimate of interest differed from that of the company.
A TTSL spokesperson did not respond to text messages seeking comments.
Last September, the union cabinet approved a relief package for the telecom sector, which included a four-year moratorium on AGR and spectrum payments. Companies were also given an option to convert interest on deferred liabilities into equity.
Now both the Tata Group companies have withdrawn the offer to convert interest into equity. In a stock exchange communication on February 1, TTML said the company’s board decided to withdraw its offer “as the interest amount eligible for conversion is much lesser than as expected and calculated by the company”.
TTML had estimated net present value of interest at Rs 850 crore and that would result in 9.5 per cent stake issuance to the government. As per the Department of Telecommunications, the NPV worked out to be Rs 195.22 crore.