hometelecom NewsTelecom relief package: Government announces contours of equity conversion formula with telcos
Telecom relief package: Government announces contours of equity conversion formula with telcos
The letter gives a 10-day deadline to reply on whether they will be opting for the AGR or the spectrum dues moratorium and whether they will be opting for the equity conversion scheme.
The telecom department, in consultation with the finance ministry, has written to telecom companies, sharing the contours of the equity conversion formula.
Ashmit Kumar reports that the letter gives a 10-day deadline to reply on whether they will be opting for the AGR (spectrum) dues moratorium and whether they will be opting for the equity conversion scheme.
The letter from the Department of Telecom (DoT) says the scheme is optional for telcos; they may or may not choose to participate in it.
The Cabinet had said that there will be a four-year moratorium for AGR as well as spectrum dues, and the interest for these dues can be converted to a loan. This loan then can be converted to equity, and the telcos will be bound to issue equity shares on preferential basis.
Sanjay Kapoor, former CEO - India and South Asia, Airtel, in an interview to CNBC-TV18, said, "The government had already mentioned about this option being available. All they have done today is to announce that the prices will be based on August 14, 2021; the price of the shares will not be less than the average price of the last six months, and the shares will be allotted on preferential basis. According to me, this information has to be processed by the shareholders of each of these companies; no one individual can go and take this call. So, I am sure they will see how the dilution for other shareholders takes place based on this option available and how their rights get impacted by this. So, based on that, they will take a decision."
Also Read: DoT allows telcos to digitise CAFs
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(Edited by : Thomas Abraham)
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