On Tuesday, the business said that it was in talks with ATC about extending the agreement and that it will seek new shareholder approval on the idea. Vodafone Idea owes ATC, its tower provider, around Rs 3,000 crore.
According to an exchange filing on Saturday, Vodafone Idea’s plan to settle Rs 1,600 crore in debt with equipment vendor ATC Telecom Infrastructure through the issue of equity convertible debt bonds will now take place on February 28 next year. Both firms have agreed to extend the deadline for converting Vodafone Idea’s interest dues into equity, which was set to expire on December 6, in the absence of information from the government.
The issuing of bonds to ATC is again subject to the government’s conversion of interest dues into equity, according to Vodafone Idea. The corporation has decided to convert around Rs 16,000 crore of interest obligation owed to the government into equity.
This will equal to about 33% of the firm, while promoters’ interest will be reduced from 74.99% to 50%.
On Tuesday, the business said that it was in talks with ATC about extending the agreement and that it will seek new shareholder approval on the idea. Vodafone Idea owes ATC, its tower provider, around Rs 3,000 crore.
The business gained shareholder permission last month to issue up to 16,000 optionally convertible debentures (OCDs) with a face value of Rs 10 lakh apiece in one or more tranches. If the sum is not paid within 18 months, ATC would have the option to convert the debt into equity at a price of Rs 10 per share.
However, one among the criteria ATC imposed before accepting Vodafone Idea’s bid was that the government convert the interest due from the postponement of adjusted gross revenue and spectrum dues into firm equity shares.
“Because the firm has not received any information from the Government of India regarding such conversion (interest dues conversion into equity), the issuing of OCDs to ATC has not been completed within the shareholders resolution’s validity period” (i.e. 15 days from the date of passing of the resolution). As a result, the shareholders’ resolution has lapsed,” Vodafone Idea stated in a stock market statement.
ATC has recently voiced worries about Vodafone Idea’s capacity to pay its bills in January. In the September quarter, ATC’s payment gap from Vodafone Idea was around Rs 392 crore.
“Based on VIL (Vodafone Idea) indications, we plan to postpone recognition of a comparable amount for the three months ended December 31, pending resolution.” “VIL has signalled its goal to fulfil the entire amount of its contractual obligations beginning January 1, 2023, however no assurance can be given that this will occur,” the tower firm said in a Securities and Exchange Commission filing.