Vodafone Idea’s Debt to Equity – Latest news headlines


The Government of India is set to become the largest shareholder of Vodafone Idea with 35.8 percent stake as the company’s board has approved conversion of interest on deferred spectrum and Adjusted Gross Revenue (AGR) dues into equity, Vodafone Idea said on Tuesday.

The debt-laden Vodafone Idea, a joint venture of UK-based Vodafone Group and Kumar Mangalam Birla-led Aditya Birla Group, has opted for conversion of interest on deferred spectrum and Adjusted Gross Revenue (AGR) liabilities into equity.

The conversion will result in dilution to all the existing shareholders of the Company, including the Promoters.

Following conversion, it is expected that the Government will hold around 35.8 percent of the total outstanding shares of the Company, and that the Promoter shareholders would hold around 28.5 percent (Vodafone Group) and around 17.8 percent (Aditya Birla Group), respectively, Vodafone Idea said in a statement.

The share price of Vodafone Idea slumped following the announcement. Trading in Vodafone Idea started sharply down at Rs. 13.40 at the Bombay Stock Exchange (BSE) on Tuesday against the previous day’s close at Rs. 14.85. The company’s share price plummeted to a low of Rs. 12.05 in the morning trade, which is 18.85 percent lower from its previous day’s close.

The company’s share price recovered later in the day. At 11.10am at the Bombay Stock Exchange (BSE) Vodafone Idea share was trading at Rs. 13.

The Board of Directors of Vodafone Idea, at its meeting held on 10th January 2022, approved the conversion of the full amount of such interest related to spectrum auction instalments and AGR Dues into equity.

“The Net Present Value (NPV) of this interest is expected to be about Rs. 16,000 crore as per the Company’s best estimates, subject to confirmation by the DoT. Since the average price of the Company’s shares at the relevant date of 14.08.2021 was below par value, the equity shares will be issued to the Government at par value of Rs. 10 per share, subject to final confirmation by the DoT,” Vodafone Idea said in a regulatory filing to the stock exchanges.

Union cabinet on September 15 approved a slew of measures to support the cash-strapped telecom firms. The relief measures include a four-year moratorium on payment of spectrum and AGR dues. The telecom firms have also been given the option to pay the interest amount arising due to the deferment of payments by way of issuing equity to the government.

Following the government’s announcement Bharti Airtel and Vodafone Idea opted for the four-year moratorium.

However, Bharti Airtel recently decided to pay the interest amount to the government instead of issuing the equity.

After the conversion of the dues into equity, the Government of India will become the largest shareholder of Vodafone Idea. This will require changes in the company’s Articles of Association.

“The governance and other rights of the Promoter shareholders are governed by a Shareholders Agreement (SHA) to which the Company is a party and are also incorporated in the Articles of Association of the Company,” Vodafone Idea said.

The rights are subject to a minimum Qualifying Threshold of 21 percent for each Promoter group, and in light of the conversion of interest into equity, the Promoters have mutually agreed to amend the existing SHA for reducing the minimum Qualifying Threshold from 21 percent to 13 percent for the purpose of exercising certain governing rights e.g. appointment of directors and relating to appointment of certain key officials, etc.

Vodafone Idea said its Board has also taken note of the proposed changes to the existing Shareholders Agreement (SHA), and accordingly authorised execution of the same and also recommended changes in the Articles of Association (AoA) to give effect to the changes in the SHA.

The amendment to the AoA shall be subject to the approval of shareholders in general meeting, for which the Board has authorised officials of the Company to decide the date of shareholders meeting in accordance with the terms of the amendment to the existing SHA as approved by the Board, the company said.


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US Industry Body Recommends Ideas To Biden | Sidnaz Blog


USIBC recommended restructuring and re-energising the US-India Health Dialogue

The US-India Business Council on Tuesday recommended a slew of big ideas to the new Biden Administration to strengthen the India-US partnership, including reconstituting the existing US-India Trade and Commercial dialogue and creating a new digital partnership under the headship of Vice President Kamala Harris. US India Business Council (USIBC), on the occasion of India’s 72nd Republic Day, also recommended to the Biden Administration to restructure the US-India Strategic Energy Dialogue to include Climate and Sustainable Growth and create a US-India Scholars Endowment to support higher education exchanges.

The ideas also include reimagining and reconstitute existing US-India Trade and Commercial Dialogues into a single US-India Strategic Trade Dialogue, creating a new US-India Global Digital Partnership to be headed by Vice President Harris, and restructuring the US-India Health Dialogue to expand the mandate and include private sector participation, according to the USIBC. The recommendations reflect USIBC’s long standing view that the natural partnership between the two nations can be leveraged to strengthen both countries’ economic recoveries and create a foundation for economic growth and job creation in the years ahead, it said.

USIBC president Nisha Desai Biswal said: “As leaders around the globe reconsider their approach to global trade and investment, both the US and India can and should do more to achieve the shared goal of $ 500 billion in two-way trade”. USIBC said it stands ready to support the Biden administration on work to develop the economic policies that will transform the two economies and create millions of high-quality jobs at home and abroad.

The US and India share a common set of values, robust democratic systems, and cultures of entrepreneurship, as well as long-standing people-to-people ties that make the two countries natural partners, it said. India-US commercial relationship has seen fast-paced growth over the past decade, with bilateral goods and services trade growing 12.6 per cent in 2019 to reach $ 146.1 billion. Still, the relationship holds significant untapped potential.

Business-friendly policies can unlock upwards of $ 150 billion in new trade over the next four years, as resolution of regulatory issues for both US and Indian companies opens the door for more expansive growth, the USIBC said. In its submission, the USIBC recommended that the new USISTD be co-chaired by the US Secretary of Commerce, the US Secretary of State, and the US Trade Representative, who would invite the Government of India to name similar counterparts.

The USISTD should focus on reducing trade impediments to strengthen the strategic relationship and support a goal of $ 500 billion in two-way trade by 2024. For the USISTD to succeed, both governments must build a comprehensive “wish list” of core issues of importance to industry, it said.
The USIBC has also recommended the two sides set up an expert group consisting of senior officials, industry representatives and academic thought leaders to build a document for discussion under the USISTD. The USIBC, in collaboration with an India-based counterpart, can partner with the US and Indian governments to launch this expert group, it said.

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Proposing the creation of a US-India Global Digital Partnership (USIGDP) to facilitate discussions between critical stakeholders across government and industry, USIBC said that following the model of the National Space Council, the USIGDP should be headed by Vice President Harris, who would delegate critical elements of the discussion to relevant departments or agencies.

Through discussion with the Government of India, appropriate counterpart(s) within the Prime Minister’s Office could be identified, it said. The US and India are leaders in the digital economy, which powers a vast share of global innovation, trade and investment, and STEM job creation. A successful Indian-American— including many in the tech sector—provides US and Indian industry with access to capital, technology, and a high-quality pool of technical talent.

“The Biden administration should invest in partnerships that position the US and India to lead the next generation of technology development,” USIBC said. Observing that the COVID-19 pandemic fundamentally reshaped global health discussions and priorities, USIBC recommended restructuring and re-energising the US-India Health Dialogue to create a forum that can tackle important policy issues in a post-pandemic era. To create a sustainable and resilient recovery, the US-India Health Dialogue should promote economic, trade, health, and social collaboration between the two governments and private sector institutions from both countries, it said.

Noting that the US-India Strategic Energy Dialogue is a dynamic platform for discussion, but in recent years has moved away from climate goals, USIBC said that with the appointment of US Special Presidential Envoy for Climate John Kerry, it is an opportune time to reintroduce climate into the existing dialogue. This discussion could be co-chaired by Special Presidential Envoy Kerry and the US Secretary of Energy and would leverage expertise from government, industry, US National Laboratories, and research institutions.



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