Telecom Package: Bharti not to avail option of converting interest on dues to equity

“…We wish to inform you that the company has confirmed to DoT that it will not avail the option of conversion of the interest on deferred spectrum and AGR dues into equity,” Bharti said in a regulatory filing.

The DoT had issued a notification to telecom operators on October 14, seeking to know their options around moratorium and equity conversion.
The DoT had issued a notification to telecom operators on October 14, seeking to know their options around moratorium and equity conversion.

After availing the option of the four-year moratorium on payment of adjusted gross revenue (AGR) and spectrum dues, Bharti Airtel on Friday told the Department of Telecommunications (DoT) that it will not go for conversion of the interest component into equity. Under the telecom reforms package announced in September 2021, operators had the option to offer equity to the government in lieu of the interest part of the dues.

“…We wish to inform you that the company has confirmed to DoT that it will not avail the option of conversion of the interest on deferred spectrum and AGR dues into equity,” Bharti said in a regulatory filing.

Vodafone Idea, which has also opted for the moratorium offer, is yet to take a decision on the option of conversion of the interest into equity part.
The DoT had issued a notification to telecom operators on October 14, seeking to know their options around moratorium and equity conversion.

Telcos were given 90 days to confirm whether they would be opting for paying the interest which accrues as a result of the deferral by way of offering equity to the government.

Bharti Airtel on October 25 last year had informed DoT about its acceptance of the four-year moratorium.

Earlier in an interview with FE, Bharti Airtel chairman Sunil Bharti Mittal had said the company would get a cash flow relief of about Rs 35,000-40,000 crore by opting for the four-year AGR and spectrum payment moratorium.

Regarding the clause that operators have the option to pay the interest amount in equity, he had said the board would decide on the matter. “In the case of Airtel the total amount of interest is Rs 7,500 to Rs 10,000 crore,” he had said.

The moratorium was part of the government’s revival package for the telecom sector, which offered a combination of cash flow relief for the financially stressed operators as well as long-term measures like redefinition of AGR and scrapping of spectrum usage charge in future auctions.

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