Tata Teleservices opts for equity conversion; govt may get 9.5% stake
Tata Teleservices on Tuesday said that it will opt for conversion of full amount of interest adjusted gross revenue dues (AGR) into equity. Following conversion, it is expected that the government will hold approximately 9.5% of the total outstanding shares of the telco, the company said in a regulatory filing.
The company’s decision comes on the same day when Vodafone Idea took a similar decision.
The Net Present Value (NPV) of this interest is expected to be approximately Rs 850 crore as per the telco, subject to confirmation by the DoT.
“The average price of the company’s shares at the relevant date of August 14, 2021 as per the calculation method provided in the DoT Communication works out to be approximately Rs 41.50 per share, subject to final confirmation by the DoT. In case of conversion, it will result in dilution of all the existing shareholders of the Company, including the Promoters. Following conversion, it is expected that the Government will hold approx. 9.5% of the total outstanding shares of the Company,” Tata Teleservices stated.
The government has given telecom operators an option of paying interest for the 4 years of deferment on the deferred spectrum installments and AGR dues by way of conversion into equity of the NPV of such interest amount.
Earlier on Tuesday, Vodafone Idea had announced that it has decided to opt for converting about Rs 16,000 crore interest dues liability payable to the government into equity, which will amount to around 35.8% stake in the company, as per a regulatory filing of the telecom firm. Following the announcement, shares of Vi plunged over 20% at Rs 11.80 apiece on BSE today.
Shares of Tata Teleservices on Tuesday ended 5% up at Rs 291.05 apiece on BSE.
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