Vodafone Idea’s ATC debenture issue proposal lapses | The Financial Express

Vodafone Idea’s ATC debenture issue proposal lapses

The company said it is in discussions with ATC for an extension and will also seek fresh shareholders’ approval on the proposal. Vodafone Idea owes about Rs 3,000 crore to its tower vendor ATC.

Vodafone Idea’s ATC debenture issue proposal lapses
VIL has opted to convert about Rs 16,000 crore of interest liability payable to the government into equity, which will amount to a stake of around 33%, while promoters' holding will come down from 74.99% to 50%.

Vodafone Idea on Tuesday said its proposal to settle Rs 1,600 crore dues with equipment vendor ATC Telecom Infrastructure through issuance of equity convertible debt bonds has lapsed in absence of communication from the government on converting dues into equity.

The company said it is in discussions with ATC for an extension and will also seek fresh shareholders’ approval on the proposal. Vodafone Idea owes about Rs 3,000 crore to its tower vendor ATC.

Also Read: Govt to Vodafone Idea: Equity conversion after 5G rollout

Last month, the company had received approval from its shareholders for issuance of up to 16,000 optionally convertible debentures (OCD) having a face value of Rs 1 million each, in one or more tranches. The amount, if unpaid in 18 months, would also give ATC an option to convert the dues into equity at a price of Rs 10 per share.

However, one of the conditions set by ATC was the government’s conversion of interest dues from deferment of adjusted gross revenue and spectrum dues into equity shares of the company.

“As the company has not received any communication from the Government of India on such conversion, the issuance of OCDs to ATC has not been completed within the validity period of the shareholders’ resolution (i.e. 15 days from the date of passing of the resolution). Accordingly, the shareholders’ resolution has lapsed,” Vodafone Idea said in an exchange filing.

VIL has opted to convert about Rs 16,000 crore of interest liability payable to the government into equity, which will amount to a stake of around 33%, while promoters’ holding will come down from 74.99% to 50%. However, the government is yet to convert the debt into equity.

Also Read: Voda Idea loss widens to Rs 7,596 crore

Lately, ATC has expressed concerns over Vodafone Idea’s ability to clear its dues in January. For ATC, the shortfall in payments from Vodafone Idea was about Rs 392 crore in the September quarter.

“Based on indications from VIL (Vodafone Idea), we expect to defer recognition of a similar amount for the three months ended December 31, 2022, pending resolution. VIL has communicated its intent to fulfil the full amount of its contractual obligations commencing January 1, 2023, although no assurance can be given that this will occur,” the tower company said in a filing to Securities Exchange Commission. At the end of the July-September quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) was Rs 2.20 trillion, comprising deferred spectrum payment obligations of Rs 1.36 trillion, AGR liabilities of Rs 68,590 crore that are due to the government, and debt from banks and financial institutions of Rs 15,080 crore.

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First published on: 07-12-2022 at 03:00 IST