Now a big change can be seen in the situation of Vodafone Idea, which is struggling with huge debt and losses. In fact, many domestic and foreign investors including India’s well-known JSW Group and Singapore’s ST Telemedia have expressed serious desire to buy stake in this telecom company. Vodafone Idea has been going through a serious financial crisis for a long time. But, after the huge financial relief given by the Central Government as the largest shareholder of the company, now the attention of big investors has started returning towards this company.
According to the report of Economics Times, these talks are still in the initial and exploratory stage. No final seal has been given regarding the deal. Apart from JSW and ST Telemedia, America’s ‘Tillman Global Holdings’ and some other big Indian industrial houses are also in the race to buy stake in the company. In this series of investment gathering, on March 16 and 17, the top management of the company is going to hold meetings with big institutional investors in Singapore and Hong Kong.
Will the promoters sell their shares or will new shares be issued?
At present the government has about 49 percent stake in Vodafone Idea. The government has been looking for a strategic investor for a long time who can not only invest adequate capital in the company but can also run its operations smoothly. At present, the main promoters of the company include Aditya Birla Group (9.50% stake) and Britain’s Vodafone Group PLC (16.07% stake). However, it is not yet clear whether the existing promoters will sell their stake when the new investor comes in or fresh equity (new shares) will be issued in the market.
investment of 50 thousand crores
If we look at the estimates of brokerage firm ‘IIFL Securities’, the strategy looks quite interesting. If a strategic investor infuses Rs 50,000 crore of fresh capital into the company, the government can convert the spectrum liability of Rs 48,000 crore of the company into equity. The matter of relief is that even after doing this, the government’s stake will not cross the limit of 49 percent, while the company’s spectrum debt will be reduced to 40 percent.
Additionally, the government is also reevaluating the statutory dues of the company based on Adjusted Gross Revenue (AGR). This process is expected to be completed by the end of March. It is believed that this can reduce the liabilities of the company by 50 to 60 percent and it can also give a longer time of 10 years for its payment. The main objective of this step is to give a clear picture of the financial liabilities of the company to new investors before they join.