Friday, January 21, 2022

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    India to own 35.8% in Vodafone Idea after conversion of dues – TechCrunch

    Vodafone Idea announced on Tuesday that the Indian government will own 35.8% of the company after the board of directors of the third largest carrier approves the conversion of membership fees and spectrum auction installments into shares.

    A joint venture between the British giant Vodafone Group and the conglomerate of billionaire Kumar Mangalam Birla, the operator has a government fee of approximately $ 6.76 billion. After the conversion to shares, Vodafone Group’s stake will be diluted to 28.5% and Aditya Birla Group’s stake will be reduced to 17.8%. The Government of India will be the largest shareholder of wireless carriers.

    Vodafone Idea’s share price fell 12.46% in the news, trading at £ 13 per share.

    Bharti Airtel, the second-largest carrier that also pays government fees, said last week that it would not convert postponed spectrum-related payments and interest on government fees into shares.

    The announcement on Tuesday will come months after the Indian government has given businesses more time to pay membership fees. 20 years of controversy last year. (The Government of India and carriers have been arguing for 10 years on how to calculate total revenue. The government requires licenses and spectrum fees paid by carriers as part of their revenue. Telcos arises from use. He claimed only core income. The range of the spectrum should be considered in the adjusted total income calculation.)

    Nonetheless, rescue plans were important to both carriers hurt by the arrival of Reliance Jio, run by Asia’s wealthiest man Mukesh Ambani.

    Many private switchboard operators have withdrawn from the market, merged with rivals, or filed for bankruptcy after Jio seduced subscribers with cheap data and free calls. Vodafone Idea has not reported annual profits since 2017.

    Airtel and Vodafone Idea sought a $ 14 billion bailout to pay the government, but the Supreme Court of India refused last year. Vodafone Idea executives said in September last year that they hope they will succeed in raising funds to pay their membership fees.

    Analysts expected Vodafone Idea not to have to rely on fair dilution of membership fees. “The outlook improves as Vi is likely to have restrained the recent 20% tariff increase and funding for the repayment of non-convertible bonds maturing between December 2021 and February 2022. In our view, Vi is likely to continue its funding efforts from promoters and other investors rather than having the government acquire significant shares. “

    This is a developing story. read more…

    India to own 35.8% in Vodafone Idea after conversion of dues – TechCrunch Source link India to own 35.8% in Vodafone Idea after conversion of dues – TechCrunch

    The post India to own 35.8% in Vodafone Idea after conversion of dues – TechCrunch appeared first on California News Times.

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