Vodafone Idea to issue shares to Government in lieu of pending dues

The Board of Directors of Vodafone Idea Limited, at its meeting held on 10th January, 2022, has 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. The conversion will therefore 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% of the total outstanding shares of the Company, and that the Promoter shareholders would hold around 28.5% (Vodafone Group) and around 17.8% (Aditya Birla Group), respectively.

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. The rights are subject to a minimum Qualifying Threshold of 21% 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% to 13% for the purpose of exercising certain governing rights e.g. appointment of directors and relating to appointment of certain key officials etc. The Board has also taken note of the proposed changes to the existing 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.

Shares of Vodafone Idea Limited was last trading in BSE at Rs. 14.85 as compared to the previous close of Rs. 15.10. The total number of shares traded during the day was 29043222 in over 48649 trades.

The stock hit an intraday high of Rs. 15.35 and intraday low of 14.65. The net turnover during the day was Rs. 435560845.00.

Source : Equity Bulls

Keywords

VodafoneIdea INE669E01016 SharesAllotment GovernmentofIndia DoT AGRDues SpectrumDues