Vodafone Idea decides to not convert its AGR dues into equity: Report

Vodafone Idea (Vi) needs to tell its decision to DoT on September 16 if it wants to convert the FY18 and FY19 dues into equity

Vodafone Idea (Vi) will soon inform the Department of Telecommunications (DoT) that it will not convert the accrued interest on deferred adjusted gross revenue (AGR) dues for FY18 and FY19 into equity, according to a report by the Economic Times (ET). 

The report further said that the government is yet to take a call on converting Vi's dues worth Rs 16,130 crore till FY17 into equity. The Supreme Court (SC) had in 2021 allowed the conversion of dues into equity but it was only until FY17. The dues for FY18 and FY19 were not talked about in the order. 

On June 22 Vi had opted to take a four-year deferment for paying the additional dues. However, it needs to convey its decision to DoT on September 16 if it wants to convert the FY18 and FY19 dues into equity.

Bharti Airtel has already taken the option to convert the dues for FY18 and FY19 into equity. 

Earlier, DoT had provided the telcos with an option to take a four-year moratorium from FY22 and FY25 for dues till FY19. The dues can be converted to equity. 

According to ET, the DoT will finalise the equity conversion when VI's share price remains above Rs 10 apiece. On Friday, it was trading at Rs 9.25 per share. 

By June end, Vi's net debt was nearly Rs 2 trillion. It is expected to take additional Rs 10,000 crore in debt to launch the 5G services. 

If the conversion of dues to equity still goes forward, the centre will become the single largest shareholder in the company with a 33 per cent stake.