Indus Towers report on equity conversion delay due to stock price ‘erroneous’, says Vodafone Idea | The Financial Express

Indus Towers report on equity conversion delay due to stock price ‘erroneous’, says Vodafone Idea

“We wish to clarify that there is no such guideline that prohibits the Govt. (government) from taking equity if company’s current share value is less than par value,” Vodafone Idea said in its statement late on Monday.

Indus Towers report on equity conversion delay due to stock price ‘erroneous’, says Vodafone Idea
In response to Vodafone Idea, Indus Towers has removed the paragraph 'Govt stake in VIL' from its September quarter report and filed a revised report with the stock exchanges.

Vodafone Idea said Indus Towers has erroneously reported that the telecom operator’s government equity conversion is delayed due to the share price being below par value of Rs 10.

“We wish to clarify that there is no such guideline that prohibits the Govt. (government) from taking equity if company’s current share value is less than par value,” Vodafone Idea said in its statement late on Monday.

The statement from Vodafone Idea comes after Indus Towers in its report for the September quarter said that the conversion of Vodafone Idea‘s dues into equity by the government is stuck as the stock price of the telecom operator has been trading below the par value of Rs 10.

Also read| Vodafone Idea’s equity conversion by govt stuck due to stock price, says Indus Towers

Citing the Company law provisions, the tower company said that the equity conversion would only be decided once the stock price stabilises over Rs 10. “This has been erroneously reported by Indus Towers. We have taken up the matter with Indus Towers for corrective action,” Vodafone Idea said.

In response to Vodafone Idea, Indus Towers has removed the paragraph ‘Govt stake in VIL’ from its September quarter report and filed a revised report with the stock exchanges. “The Company is hereby correcting the aforesaid quarterly report by deleting the aforesaid paragraph titled ‘Govt stake in VIL’ which was incorporated erroneously,” Indus Towers said in its revised quarterly report.

Also read| Indus Towers confident about new payment plan with Voda Idea

As part of the government’s revival package for the telecom sector in September last year, Vodafone Idea had availed the option of deferring its spectrum payment and adjusted gross revenue dues for a period of four years. It also opted for the provision wherein the interest component of this deferral worth Rs 16,130 crore gets converted by the government into equity.

Post the equity conversion, the government will become the single-largest shareholder in Vodafone Idea with a 33% stake. Government’s stake conversion in Vodafone Idea is crucial for the company and its vendors like Indus Towers as that will give confidence to investors and lenders to infuse funds in Vodafone Idea.

Recently, DoT asked the company to present its fundraising plan before conversion of dues into equity.

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First published on: 01-11-2022 at 13:30 IST