Aditya Birla group and British telecom giant Vodafone Group are committed to revive the beleaguered telecom giant Vodafone Idea Ltd (VIL), says CEO Ravinder Takkar. The government's 35.8% stake will not bring any change in the operations and management of the company.
"The government doesn't want to run the company and they clarified it in my personal discussions," Takkar says.
The VIL board meeting held on Monday approved the conversion of the full amount of interest related to spectrum auction instalments and AGR into equity. Upon conversion, the government will hold about 35.8% of the total outstanding shares of VIL, while Vodafone Group would hold around 28.5% and Aditya Birla Group around 17.8%.
The promoters — Aditya Birla Group and Vodafone Group — have changed the Articles of Association of VIL to keep the company under their control with lower stake. Earlier, they needed 42% stake to control the company. They will now require just 26% to hold the governance rights to run it as promoters. However, Birla and Vodafone jointly hold 46.3% stake in the company.
VIL is also in talks with foreign investors to raise equity capital, says Takkar. "We have engaged with foreign financial institutions for the past several months for raising the capital. They are keen on investing in Indian telecom sector. However, they want clarity on the government support."
He also stated that the government has shown its commitment to the sector with the relief package, in which it gave the telco one-time options of four-year mortorium for AGR dues and spectrum fee payments, and conversion of interests into equity.
Takkar says that the government has no plan to appoint its board members. However, he didn't say anything on government's exit options. The investors have no clarity on when the government will exit from the company and at what valuations.
Takkar also said that the proposal for interest-to-equity conversion has been submitted to the government and the whole process is expected to be completed by next month. He also said that VIL will shortly announce the fundraising details.
