'Norms to convert telcos' dues into equity likely in a month'
New Delhi: The government is expected to come out with detailed guidelines for conversion of interest payment liabilities of telecom players into equity within a month, a senior official said on Thursday.
Under the telecom reforms package announced last year, three debt-ridden telcos -- Vodafone Idea Ltd (VIL), Tata Teleservices Ltd (TTSL) and Tata Teleservices (Maharashtra) Ltd (TTML) -- have proposed to convert their respective interest liabilities payable to the government into equity.
Post conversion of the liabilities, the government is projected to have a 35.8 per cent stake in VIL and around 9.5 per cent shareholding each in TTML and TTSL.
"The details of conversion of dues into equity has to come from the finance ministry. DIPAM (Department of Investment and Public Asset Management) is likely to work on the details and then send it to the Department of Telecom (DoT). The process should not take more than a month," the senior government official said.
VIL has estimated the interest liability dues payable to the government at around Rs 16,000 crore, TTSL at about Rs 4,139 crore and TTML at around Rs 850 crore.
On Wednesday, Telecom Minister Ashwini Vaishnaw said that even after conversion of dues into equity, the liability to pay past and future debt will remain with the telecom companies.
"Government will remain an investor only. The companies will be run by professionals. All the debt liabilities will remain the responsibility of the companies. The companies have given us commitment," Vaishnaw had told PTI.
VIL has proposed to allocate preferential shares to the government at Rs 10 per share, which according to analysts is at 58 per cent premium based on the share price at the relevant date of August 14, 2021.
On whether liability of payment for upcoming spectrum auction will be on the government, Vaishnaw had said the companies will have the entire responsibility for the payment for radiowaves and there will be no burden on the government.
